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TAX 3704 ASSIGNMENT 2 2020
- Institution
- University Of South Africa (Unisa)
Detailed tax administration assignment 2 with a 100% Pass mark
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TAX 3704 ASSIGNMENT 2 First semester 2020Discuss why SARS may enforce the ‘pay now argue later’ principle?
Part A
SARS is entitled to collect amounts owing by a taxpayer in terms of an
assessment
The considerations include the public interest;
obtaining full and speedy settlement of tax debts
the need to limit the ability of obstinate taxpayers to use objection and appeal
procedures
strategically to defer payment of their taxes.
Part B: Under the pay now argue later principle, what powers does the Commissioner have to
collect outstanding debts?
SARS’ ability to collect a tax debt from third parties such as a taxpayer’s bank, as well as the use
of jeopardy assessments
In terms of section 179(1) of the TAA, a senior SARS official may require third parties
who hold money of a taxpayer, for example a pension or a salary, to pay the money to
SARS if the owner of the money has tax debts. If the third-party parts with the money
contrary to the no-tice, section 179(3) stipulates that a party becomes personally liable
for the money.
The payment by a third party, for example the taxpayer’s bank to SARS in terms of
section 179 of the TAA, does not arise from the debt owed by the debtor, but because of
the obligation that this section places on the bank compelling them to satisfy the debt of
the taxpayer
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