Suspension of Payment Under Section 164: How to Pause SARS Collections

If you receive a SARS assessment that you believe is incorrect, you are not forced to simply pay and hope for the best. South African tax law allows you to dispute the assessment and, in certain cases, request that SARS pause collection while the dispute is being resolved.

This is done through Section 164 of the Tax Administration Act.

The "Pay Now, Argue Later" Rule

In South Africa, tax works on a pay now, argue later basis. This means that even if you disagree with an assessment, SARS can still expect payment by the due date.

Submitting an objection does not automatically stop collection.

This principle was confirmed in Metcash Trading Ltd v CSARS, where the court found that SARS must be able to collect revenue while disputes are ongoing. At the same time, the law recognises that this can create pressure on taxpayers, which is why Section 164 exists.

What Section 164 Actually Does

Section 164 allows you to request that SARS temporarily suspend payment of the disputed amount.

This is not automatic in most cases. You need to apply, and SARS will decide based on your specific situation.

The suspension only applies to the portion of tax that is being disputed. Any undisputed amount must still be paid.

Is Suspension Ever Automatic?

In limited situations, particularly where SARS issues an additional assessment after a self-assessment, there may be some protection once an objection is lodged.

However, this is not something you should rely on in practice.

The safest approach is always to submit a formal suspension request to SARS.

What SARS Looks At

When deciding whether to grant a suspension, SARS considers several factors.

They look at whether your objection has merit. You do not need to prove your case fully, but you must show that your argument is reasonable and supported.

They consider the type of tax involved. VAT and PAYE are treated more strictly because they are seen as funds collected on behalf of SARS.

They assess whether paying immediately would cause serious financial hardship. This needs to be backed up with actual financial information.

They also consider whether SARS is at risk of not being paid later, your overall compliance history, and whether there are any concerns around fraud.

No single factor guarantees approval. SARS weighs everything together.

How to Apply

You can submit a suspension request through SARS eFiling or as part of the dispute process.

Your application should clearly explain your objection, include supporting documents, and address the factors SARS considers, especially hardship and your prospects of success.

Make sure all your tax returns are up to date before applying. This can make a significant difference.

What Happens Next

SARS will review your application and respond, although there is no fixed deadline for a decision.

While waiting, it is important to stay engaged and keep track of any collection activity.

If your request is approved, SARS will generally hold off on the collection of the disputed amount unless the suspension is later lifted.

If SARS Says No

If your application is refused, you can take the matter further to the Tax Court, where the decision can be reconsidered.

In more serious or urgent situations, legal options through the High Court may also be available, although this is typically more complex.

Common Mistakes to Avoid

Many taxpayers assume that submitting an objection stops SARS from collecting. It does not.

Another common issue is submitting weak applications with no supporting evidence. Financial hardship must be proven, not just stated.

Late objections, outstanding returns, and poor communication with SARS can also weaken your position.

Final Thoughts

Section 164 is a valuable tool if you are disputing a SARS assessment, but it requires the right approach.

A clear, well-supported application can give you breathing room while your dispute is being resolved. A rushed or incomplete one is far less likely to succeed.

If you are dealing with a disputed assessment, act early and make sure your application is properly prepared.

Disclaimer

This article provides general information and is not legal or tax advice. Each case depends on its specific facts. Always consult a qualified professional for advice tailored to your situation.