In South Africa, the term 'suspension of payments' holds significant implications for taxpayers navigating disputes with the South African Revenue Service (SARS). When taxpayers submit objections or appeals against tax assessments or decisions made by SARS, they often find themselves in a challenging situation where SARS demands payment of the disputed tax amount upfront, regardless of the ongoing objection or appeal process.
This demand for upfront payment can cause financial strain, especially for taxpayers who believe they have valid grounds for disputing the tax assessment. To address this issue and assist taxpayers facing financial difficulty, there is a provision to apply for the suspension of payments pending the finalisation of the objection or appeal process.
The suspension of payments essentially means that taxpayers can request SARS to temporarily halt the requirement for immediate payment of the disputed tax amount while their objection or appeal is being reviewed and finalised. This suspension provides relief for taxpayers who may not be in a financial position to settle the disputed amount upfront.
The process of applying for a suspension of payments involves submitting a formal request to SARS, detailing the reasons why the taxpayer is unable to make the payment at that time. SARS will consider various factors when evaluating these requests, including the merits of the objection or appeal, the taxpayer's financial circumstances, and other relevant information provided.
If SARS approves the application for suspension of payments, the taxpayer will be granted a reprieve from making the payment until the objection or appeal process reaches its conclusion. This temporary suspension helps alleviate immediate financial burdens on taxpayers, allowing them to focus on presenting their case and engaging in the dispute resolution process without added pressure of immediate payment.
It's important to note that while payments are suspended, interest may still accrue on the outstanding amount. Therefore, taxpayers should continue to engage with SARS and fulfill ongoing requirements to ensure the timely resolution of their tax disputes.
In summary, the suspension of payments provision in South Africa offers support to taxpayers experiencing financial hardship during the objection or appeal process with SARS. This provision underscores the importance of fair and accessible tax dispute resolution mechanisms that consider the financial realities of taxpayers.