South Africa Steps Up Tax Debt Collection as SARS Expands Enforcement
The South African Revenue Service is intensifying collection of unpaid tax debt, including using its statutory authority to direct banks and other third parties to turn over money belonging to delinquent taxpayers.
The enforcement push provides another international example of a government tax authority using data, third-party relationships and administrative collection powers to accelerate recoveries without first pursuing a traditional debt collection lawsuit.
SARS Expands Collection Efforts
South African publication Newsday reported that SARS had a collection pool of approximately 532 billion South African rand in undisputed tax debt as of July, citing Jashwin Baijoo, partner and head of strategic engagement and compliance at Tax Consulting SA.
The figure represents substantial growth from the 407.9 billion rand in undisputed debt reported in March 2025.
Official SARS information confirms the broader increase in tax debt. As of Jan. 31, SARS reported 646 billion rand in total outstanding tax debt, including 518.2 billion rand that was undisputed. The agency said it had deployed 1,500 additional debt collectors and was working more closely with banks while adding legal professionals to pursue civil judgments.
Banks Can Be Ordered to Pay SARS
One of SARS’ most significant collection tools is the Third-Party Appointment process under Section 179 of South Africa’s Tax Administration Act.
SARS can direct a third party holding money for a taxpayer, including a bank or employer, to pay funds directly to the revenue agency to satisfy an outstanding tax debt. SARS generally must first deliver a final demand and allow the taxpayer time to respond.
The authority can have an immediate effect on a taxpayer’s liquidity because it does not require SARS to first obtain a court judgment. SARS also states that additional enforcement options can include civil judgments, asset attachment, liquidation or sequestration and, under certain circumstances, holding directors, members or related parties liable for tax debt.
For receivables professionals in the U.S., the development offers a useful comparison with government debt collection systems that give tax authorities administrative remedies beyond those generally available to private creditors and collection agencies.
