Registered SARS taxpayers in debt owe government a total of R96 billion. It’s no wonder the revenue service has no choice but to try and engage with these defaulters. Even if it means reaching a tax-debt compromise to recoup a portion of funds, it’s better than nothing …
According to The Citizen, SARS taxpayers in debt are being offered the opportunity to participate in an ‘expedited tax-debt compromise process.’ Interestingly, this is over and above the existing Voluntary Disclosure Programme (VDP) that’s an open-door policy for non-compliant taxpayers to voluntarily disclose defaults or undeclared income.
SARS TAXPAYERS IN DEBT
Nevertheless, the new compromise process is only being extended to SARS taxpayers in debt who agree that the aforementioned is ‘undisputed.’ As in, the debt is not up for argument and the taxpayer is on record admitting they cannot pay the full amount. Such action is possible through to the Tax Administration Act (TAA).
Tax experts say the nearly R100-billion owed to SARS reflects the scale of the compliance challenge. As such, negotiating part-payment instead of the full settlement amount serves the best interest of the fiscus and SARS taxpayers in debt. Once approved, and terms agreed upon, the balance of debt is written off. However, if the taxpayer defaults, SARS is within its rights to reinstate the full debt.
DECADES’ OLD DEBT
SARS has been managing a backlog of long-term debts, some of which are decades’ old. While traditional enforcement has yielded limited returns, this time-bound campaign will allows SARS taxpayers in debt a lifeline. And it will lead to the recovery of billions for the South African government.
Applications for assistance will open from Monday 13 October 2025 and run till Wednesday 31 December 2025. SARS says entities undergoing criminal investigation and those in business rescue are excluded from the process. Only full disclosure with comprehensive supporting documentation will be accepted in the application. Tax practitioners are allowed to work on behalf of clients with SARS.
RELIEF FOR SARS TAXPAYERS IN DEBT
Furthermore, the revenue service pledges to finalise qualifying cases within just four weeks. However, high volumes of SARS taxpayers in debt could strain capacity. As for tax relief through the VDP, SARS says it can waive of any penalties and grant full immunity from criminal prosecution, except in instances of intentional tax evasion.
For more information on the Voluntary Disclosure Programme (VDP) email: vdp@sars.gov.za or call 0800 864 613 for assistance.
