Sars Tightens the Net: Tax Dodgers Face Travel Bans and Business Shutdowns

It’s official: the South African Revenue Service (Sars) has the legal power to stop you from travelling outside the country if you haven’t paid your taxes. And that’s just the beginning.

Under Section 46 of the Tax Administration Act (TAA), a senior Sars official can demand that a taxpayer surrender their passport. This drastic action isn’t theoretical—Sars is already exercising its authority in a bid to improve tax compliance and recover revenue owed to the state.

“Sars can—and will—stop you at the airport if your tax affairs are not in order,” say legal experts.

Not Just About Travel: Sars Can Shut Down Your Business

Sars’s powers extend even further. If a taxpayer—South African or foreign—fails to comply with tax laws, Sars can require them to stop trading, effectively closing down a business. For foreign nationals, this can have devastating consequences: work or residency visas may be affected, and bank accounts can be frozen.

The message is clear: if you want to do business in South Africa, you must comply with South African tax law.

Expatriates Are Not Exempt

Many South Africans living abroad mistakenly believe they are out of Sars’s reach. But if they haven’t formally ceased tax residency, they remain liable. Sars is stepping up its tracking and enforcement—even against those who left the country years ago.

“There’s a false sense of impunity among some wealthy expatriates,” warns a tax attorney. “But the law is catching up.”

Legal Backing: The Constitution Holds

In a recent High Court ruling in Pretoria, the judge confirmed that the Sars provisions in the TAA are constitutional. The court found that while these restrictions do limit rights, they are reasonable and justifiable in an open and democratic society, given the need for revenue collection.

Following the court victory, Sars stated:

“This precedent-setting decision reaffirms Sars’ legal authority to discharge its work of collecting all revenue due to the state efficiently and effectively.”

What You Should Do

Taxpayers who are non-compliant—or simply unsure—should act fast. Options include:

• Voluntary disclosure of undeclared income

• Payment arrangements with Sars

• Consulting a tax professional under legal privilege

With increased fiscal pressure and a widening tax net, there’s no room for complacency.

Bottom line: Whether you’re a business owner, a wealthy expatriate, or just behind on your taxes, Sars has the tools—and the legal right—to act. Now is the time to get compliant before your passport or business becomes collateral.

{Source: IOL}

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