The worst thing you can do is ignore the letter of demand from SARS in the hope that it will go away. (Photo: Gallo Images / Fani Mahuntsi) 
It’s that time of year again – tax-filing season – and there’s nothing that can light a fire up your butt quite like a letter of demand from the South African Revenue Service (SARS).
I must confess that for years whenever I got my return back with a negative number, I would double and triple check that it didn’t mean I owed SARS money. (It means you are in for a refund).
When it comes to letters of demand, the onus is on you to be aware of the timelines – and to check your SARS profile. SARS typically uploads the letter of demand on your eFiling profile and, provided you have updated your contact details, it also sends an email or SMS notification.
“Unfortunately, many taxpayers only realise they’ve received this when their bank account is already frozen or their salary garnished,” says Razael Manikus, chief operations officer at tax advisory business Latita Africa. “At that stage it’s very serious, but you can still solve the problem by acting immediately.”
What is a letter of demand?
It’s a formal notice issued when SARS believes you owe tax. Often this debt is due to incorrect IRP5s or third-party data mismatches; unclaimed deductions not reflected correctly (such as medical aid or retirement contributions); undisclosed investment or rental income; penalties on late submissions or underpayments from previous years; or reversed refunds after a SARS audit.
If there is incorrect information on your auto-assessment, you cannot simply tell SARS and expect a correction. You have to go back to the responsible third party and they have to notify SARS of the correction required. For example, if the amount you contributed to a tax-free savings account with your bank has been overreported, you have to contact the bank to correct the information that was supplied to SARS.
Manikus says that although SARS often sends reminders before the official final letter of demand, the reminders are more a courteous gesture than a legally required step.
“SARS can send SMSs, emails or eFiling notifications reminding you of outstanding balances. These are not legal letters and don’t trigger the 10-business-day enforcement countdown. The purpose is to give taxpayers a chance to settle before formal debt collection begins,” he says.
The final (and only) letter of demand issued via eFiling, email or physical post to your registered address is the first legal step in SARS debt collection. This letter starts the 10-business-day period before SARS can take enforcement action such as debiting your bank account, garnishing your salary or attaching your property.
The worst thing you can do is ignore the letter of demand in the hope that it will go away. It won’t. A late payment automatically incurs a penalty of 10% of the total amount payable – and SARS charges interest at a rate of 10% a year.
In cases of repeat noncompliance, SARS can even refer you to the National Prosecuting Authority.
How to proactively address a letter of demand
- Log into your SARS eFiling profile to check the date when the letter of demand was issued (under “correspondence”). That’s the start of your 10-business-day response window.
- Review your statement of account to identify the source of your debt and the tax period involved. If the amount is correct and you’re able to pay, do this immediately.
- Apply for a suspension of payment if you can’t pay or need breathing space before disputing the amount. This legal mechanism doesn’t cancel the debt but pauses SARS’s ability to collect.
- You can apply for a suspension of payment via eFiling or your tax representative.
- Attach a statement of financial hardship and your latest bank statements, or a note explaining your intention to dispute.
- If you accept your debt but can’t pay in full, SARS may agree to a deferred payment plan with instalments. Or you could negotiate a compromise of tax debt, where SARS reduces your debt if the full payment would cause you financial hardship.
Disagreements or objections
Manikus points out that you have the right to lodge a formal notice of objection on eFiling if you disagree with your assessment. You have 30 business days from the original assessment to lodge an objection.
“Clearly explain the reason for your objection and attach supporting documentation [such as invoices, proof of payments or bank statements],” he advises.
Individual taxpayers have until Monday, 20 October, to submit their returns.
Provisional taxpayers have until Monday, 19 January 2026, to submit their returns.
Read more: The clicks, the scans, the scams – how to survive SA’s annual tax return season
SARS contact details
- SARS website: visit sars.gov.za and click on the Individuals tab.
- SARS online query system: https://tools.sars.gov.za/soqs.
- SARS WhatsApp: send “Hi” or “Hello” to 0800 117 277.
- AI virtual assistant: available 24/7 on the SARS website to answer queries.
- USSD services: Dial *134*7277# to access SARS services.
- SARS YouTube: visit @sarstax for how-to videos. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
