SARS Admits Sending R0.01 Tax Demand to Taxpayer Was an Administrative Error

• SARS conceded that a final payment demand for one cent was dispatched to a taxpayer due to a systemic administrative error
• The notice gave the recipient ten business days to settle the R0.01 balance and outlined formal legal debt recovery options
• SARS declined to explain how the error occurred or whether a minimum debt threshold exists before pursuing outstanding balances

SOUTH AFRICA — The South African Revenue Service has admitted that a final payment demand sent to a taxpayer for an outstanding balance of one cent was the result of an administrative error and should never have been issued.

SARS confirmed the blunder after IOL made inquiries into the matter, though the revenue service offered no explanation of how the flaw arose within its systems. It also did not clarify whether a formal minimum threshold governs when the agency pursues outstanding debt, or whether a single-cent balance could affect a taxpayer's compliance status.

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The R0.01 demand that triggered the admission

The notice was first reported by Moneyweb, which received an anonymised copy of the communication. According to the document, the taxpayer was given ten business days to settle the one-cent balance. The automated notice included standard legal recovery language, informing the recipient of options to defer payment, negotiate a compromise on the debt, or apply for a penalty waiver once the primary one-cent capital amount had been paid.

A pattern of SARS administrative errors

This is not the first time SARS, which is also targeting taxpayers' bank accounts for unpaid tax debt, has faced scrutiny over internal administrative missteps. In 2016, a Tax Court ruling referenced a string of system-related errors by SARS, including a case where conflicting assessments were issued to a taxpayer. The revenue service initially indicated zero tax was payable due to a system fault, then incorrectly reflected a refund of over R10.4 million. The court cited these repeated errors when reducing an additional penalty imposed on the taxpayer from 50% to 35%.

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In 2019, a forensic auditor preparing for a tax appeal identified three separate calculation errors made by SARS. The Supreme Court of Appeal ultimately dismissed that taxpayer's appeal with costs, despite the identified miscalculations. SARS did not indicate what steps, if any, would be taken to prevent similar automated notices from being generated and sent to taxpayers in the future.

Major League star receives letter of demand

In a related article, Briefly News reported on Major League DJz star Banele Khanya Mbere’s R1.19 million tax debt and the final letter of demand issued by SARS. The revenue authority reportedly gave him 10 days to settle the amount or face further legal enforcement.

Source: Briefly News