SARS, Your Bank, and Your Rights: What South African Courts Say About Unlawful Tax Collections.

Are You Being Debited by SARS Without Warning? Here’s What the Courts Now Say.

In a significant 2025 ruling by the Pretoria High Court, South African taxpayers were handed a major win: SARS cannot simply collect outstanding tax debt by appointing your bank or any third party as a collection agent without following proper legal procedures.

This judgment confirms what tax attorneys have long cautioned: you have the right to be notified, to respond, and to be treated fairly before SARS touches your bank account.

The Case in Brief

SARS had issued a notice of tax debt to a taxpayer before the payment due date had even passed. It then used that notice as justification to appoint the taxpayer’s bank as a collection agent under Section 179 of the Tax Administration Act, 2011 (TAA).

The Court ruled decisively against SARS, ordering a refund of the funds, interest, and litigation costs. The decision sets clear boundaries for SARS’s powers under Section 179 and upholds the procedural rights of taxpayers.

Your Legal Rights Under Section 179 of the TAA

According to the High Court, SARS must meet all of the following conditions before appointing a third party (like a bank) to collect outstanding tax debt:

• A tax debt must exist

• The payment due date must have expired

• A final letter of demand must be delivered to you

• That letter must be sent at least 10 business days before SARS acts

• It must explain what recovery action SARS intends to take

• It must advise you of relief options or dispute mechanisms

Notices that are “pre-due date” or silently uploaded to eFiling without actual delivery to your tax profile or last known address do not qualify as valid notice.

Why This Matters in 2025

We’ve seen a surge in automated SARS bank collections especially against small businesses and individual taxpayers. In many cases, these actions are:

• Triggered by outdated or incorrect addresses

• Based on notices that were never properly served

• Executed before the tax is technically “due”

  
  

The 2025 ruling reinforces the importance of SARS following due process, aligning its conduct with the Promotion of Administrative Justice Act (PAJA), which requires public bodies to give notice before making decisions that adversely affect rights.

Practical Takeaways for Taxpayers

• Keep your contact details updated with SARS (especially address and email)

• Regularly check your eFiling profile for uploaded letters

• Respond immediately to any letter of demand—especially if you're disputing the amount or requesting payment terms

• If SARS debits your account without notice, you may have grounds for a refund and legal costs

• Retain copies of all correspondence, statements, and submission records

Need Legal Help? We Can Intervene.

At Kern, Armstrong & Associates, our tax and litigation teams act quickly to:

• Review the legality of SARS’s collection actions

• Lodge urgent applications to interdict or reverse unlawful third-party collections

• Challenge procedural breaches under the Tax Administration Act and PAJA

• Recover wrongfully debited funds, including interest and legal costs

Conclusion: SARS Must Follow the Law—And So Should You

SARS’s powers are broad, but not absolute. As this 2025 judgment confirms, your rights as a taxpayer are protected by law and SARS must notify you properly and wait the correct period before acting.

If you’ve received a letter of demand, or worse your account has been debited, act fast. With the right legal advice, you can stop unauthorised collections, challenge unlawful notices, and hold SARS accountable.

Get in touch with us today: info@kernattorneys.co.za