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Latest Tax Dispute Developments

Of late, there has been a number of developments pertaining to tax disputes. Most notably, the Minister of Finance approved new dispute resolution rules in terms of section 103 of the Tax Administration Act.


The new rules became effective immediately on 10 March 2023. The new rules only apply to new dispute proceedings. Existing proceedings should still be dealt with under the previous rules.

Some of the more significant amendments are:

  • The period within which a taxpayer may lodge an objection was increased from 30 days to 80 days.
  • Electronic submissions via an email address are now specifically provided for.
  • Taxpayers are required to submit all relevant material supporting the grounds of objection when lodging the objection.
  • If an alternative dispute resolution (“ADR”) facilitator is to be appointed, the ADR facilitator should be acceptable to both SARS and the taxpayer.
  • SARS is now required to issue an assessment within 45 days after the receipt of the Tax Court’s decision.


Section 104 of the Tax Administration Act allows a taxpayer that is aggrieved by an assessment to object against such an assessment. Section 105 confirms that an aggrieved taxpayer may only approach the High Court directly, if so directed by the High Court.

It was held in Commissioner for the South African Revenue Service v Rappa Resources (Pty) Ltd (Case No 1205/2021) [2023] ZASCA 28 and United Manganese of Kalahari v Commissioner for the South African Revenue Service (Case No 1231/2021) [2023] ZASCA 29, that a taxpayer must first apply to the High Court to direct that it has the requisite jurisdiction to consider the tax dispute. The High Court will only permit such deviation where there are exceptional circumstances.

These cases confirmed that there is no rule or definition of what constitutes exceptional circumstances. Generally, a taxpayer is expected to first exhaust internal remedies such as the objection and appeal process.


Section 129(3) of the Tax Administration Act empowers the Tax Court to increase an understatement penalty. In Lance Dickson Construction (LDC) v Commissioner for SARS (Case No A 211/2021) [2023], however, it was held that this requires a two-pronged approach. Firstly, this discretion can only be exercised where the issue has been properly raised for adjudication before the Tax Court. Secondly, SARS is still required to discharge the burden of proof regarding the behavioural category relied upon in determining the understatement penalty.


While the new dispute rules have introduced some welcome changes, it is important that taxpayers know how to apply these rules correctly. Procedural missteps can have unintended consequences.

It may also be in taxpayers’ best interest to familiarise themselves not only with their own rights, but also the rights of SARS and the requisite burden of proof imposed on SARS.

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