For many taxpayers, few words inspire as much anxiety as “pay now, argue later”. This long‑standing rule allows the South African Revenue Service (SARS) to collect disputed tax immediately, even while objections or appeals are still pending. But a recent High Court ruling has signalled an important shift, curbing what courts have described as SARS’s “reflexive no” to suspension‑of‑payment requests and reinforcing the growing importance of procedural law and evidence in tax disputes.
Under section 164 of the Tax Administration Act, taxpayers may request a suspension of payment while a dispute is being resolved. For years however, many applications were declined with cryptic or generic reasons, often citing “jeopardy to recovery” or “inadequate security”. Tax practitioners reported that refusals appeared almost automatic, regardless of the facts. SARS must act fairly and the decision to deny a suspension can be challenged.
That approach was firmly challenged in a landmark Pretoria High Court decision delivered in February 2026 in Ferreira v CSARS. The case concerned additional tax assessments exceeding R500 million. The taxpayer offered security worth more than double the disputed amount, yet SARS still refused to suspend payment. The court found that SARS had failed to properly consider the evidence before it and that its decision was irrational. In a rare move, the court substituted SARS’s decision and ordered the suspension of payment itself.
The ruling does not abolish the “pay now, argue later” rule. Instead, it raises the standard that SARS must meet when deciding whether to enforce it. Decisions must now be evidence‑based, rational, and properly reasoned. A blanket policy of refusal is unlawful. Procedural fairness, the court made clear, is not a box‑ticking exercise but a constitutional requirement. SARS must act fairly and the decision to deny a suspension can be challenged.
This emphasis on process and proof closely mirrors trends emerging from recent Tax Court decisions, including Pear (Pty) Ltd v CSARS. In that case, the court dealt with prescription, the merits of the assessment and the onus of proof. SARS attempted to reopen an old tax year by alleging non-disclosure but failed to prove it with evidence. The court focused on whether SARS proved material non-disclosure or misrepresentation to justify reopening assessments, highlighting that mere errors do not allow for bypassing prescription rules. The court held that suspicion is not enough and that statutory time limits exist to protect taxpayers from endless re‑assessment.
What links Pear to the suspension‑of‑payment ruling is the courts’ growing insistence on proper procedure. In both cases, SARS lost not because tax was necessarily unpaid, but because it could not justify its actions with facts and evidence. Where SARS alleges fraud, misrepresentation or recovery risk, it bears the burden of proving those allegations. Courts are no longer willing to accept conclusions unsupported by objective facts.
For businesses and individuals the implications are significant. Strong legal rights now exist but they depend on proper engagement. Taxpayers must submit detailed suspension requests and can be requested to explain financial hardship, tender realistic security and support claims with documents. Procedural law cuts both ways - it can protect taxpayers - but only if steps are followed correctly. Taxpayers are urged to consult with tax professionals and registered accountants specialising in tax administration and compliance to ensure maximum and timely compliance.
For SARS, the message is equally clear. Revenue collection remains vital, particularly in a strained economy, but enforcement must be lawful, transparent, and fair. Courts are increasingly willing to intervene where discretion is exercised mechanically or without regard to evidence. SARS must properly consider requests and in certain cases the courts can instruct SARS to suspend payment if they are unreasonable.
Ultimately, these judgments mark an important recalibration. Tax disputes are no longer decided solely by power or urgency, but by process and proof. In reaffirming procedural law and evidentiary standards, the courts have reminded all parties that effective tax administration depends not just on collection, but on fairness, legality, and trust in the system itself.
Please note that the above is for information purposes only and does not constitute tax/financial advice. As everyone’s personal circumstances vary, we recommend they seek advice on the matter. While every effort is made to ensure accuracy, Nexia SAB&T does not accept responsibility for any inaccuracies or errors contained herein.
Article prepared by: Stefan Diederiks CA(SA)
Registered Tax Practitioner
For any queries or further information, please contact:
• Mansoor Salee
Director
M: (+27) 82 454 4786| E: mansoor@nexia-sabt.co.za