Professional insights on the new collection landscape
and how to protect your interests
The South African Revenue Service (SARS) has significantly intensified its debt collection efforts over the past year, implementing aggressive new strategies to recover outstanding tax debts. As your trusted tax advisors, we want to ensure you understand these developments and how they might affect you.
SARS has made a substantial investment in debt recovery, recruiting and training over 800 new employees specifically for debt collection activities during the 2024/2025 financial year. This represents one of the largest expansions in collection resources we’ve seen from the revenue service.
The process typically starts with telephone contact, but SARS has made it clear they will escalate to legal action when taxpayers remain unresponsive. This structured approach means they’re leaving no stone unturned in pursuing outstanding obligations.
One of the most significant changes we’ve observed is SARS’s decision to outsource debt collection to external agencies. Following a formal tender process, SARS began appointing third-party external debt collectors (EDC) from November 2023.
These external collectors specifically target:
If you receive communication from an external debt collector claiming to represent SARS, this is legitimate and should be taken seriously.
SARS’s enhanced collection efforts have yielded impressive results. Recent compliance activities generated R2 billion in recovered outstanding debt, with an additional R8.4 billion raised through Customs-related assessments. These figures demonstrate that SARS is serious about maximizing revenue recovery.
For the 2024/25 financial year, SARS achieved a 6.1% year-on-year growth in revenue collections, with their total revenue target set at R1.846 trillion.
When standard collection efforts fail, SARS doesn’t hesitate to use its full range of enforcement powers, including:
We’ve seen these measures implemented more frequently, particularly against taxpayers who ignore communication attempts.
The message from SARS is clear: outstanding tax obligations will be pursued aggressively. If you have overdue amounts, expect increased contact from both SARS directly and potentially from external debt collectors.
Our Professional Advice:
Act Proactively: Don’t wait for SARS to contact you. If you’re aware of outstanding obligations, address them immediately.
Communicate Early: SARS typically focuses external collection efforts on accounts where taxpayers have made no attempts to engage. Proactive communication can prevent escalation.
Seek Professional Guidance: Tax debt situations can be complex, with various payment arrangement options available. Professional advice can help you navigate the best path forward.
Keep Records: Maintain detailed records of all communications with SARS and any payment arrangements made.
As qualified tax professionals and members of The South African Institute of Tax Professionals, we understand the complexities of tax compliance and SARS procedures. Our role is to simplify these obligations and manage the process on your behalf.
If you’re facing tax debt issues or concerned about potential SARS action, we can:
SARS has committed to even faster revenue collection in the 2025/26 financial year, building on the success of these enhanced initiatives. This suggests that the intensified debt collection efforts will continue and potentially expand further.
For taxpayers, this means tax compliance is more important than ever. The days of ignoring SARS communications or hoping debt will be overlooked are firmly in the past.
If you have any concerns about your tax position or have received communication from SARS regarding outstanding amounts, don’t delay in seeking professional assistance. Early intervention can make the difference between a manageable payment arrangement and aggressive enforcement action.
Contact us via email or call our offices to discuss how we can help you navigate these enhanced SARS debt collection procedures. As your tax professionals, we’re here to ensure you remain compliant and protected from unnecessary enforcement actions.
Remember: At The SA Tax Company, we don’t just compile and submit returns – we provide invaluable individual tax advice and ongoing support to keep you on the right side of SARS.