Falling behind with SARS happens to good businesses and individuals, often because of a cash flow squeeze or an unexpected assessment. Ignoring it is the expensive option: penalties and interest keep accruing, and SARS has strong collection powers, including appointing your bank or debtors as third-party agents.
First, confirm what you actually owe
Before negotiating, check that the debt is correct. Assessments can include estimated figures, duplicated penalties or payments that were allocated to the wrong tax period. If an assessment is wrong, the right route is an objection, not a payment plan.
Your main options under the Tax Administration Act
| Option | When it fits |
|---|---|
| Instalment payment agreement | You accept the debt but can't pay it in one go. SARS can agree to payments over a set period. Interest continues to run. |
| Deferral of payment | A temporary cash flow problem means you need more time before paying. |
| Suspension of payment | You are disputing the assessment and ask SARS not to collect the disputed amount while the objection or appeal is decided. |
| Compromise of a tax debt | In limited circumstances, SARS may accept a reduced amount where full payment is not possible and a compromise is in the interest of the fiscus. Strict requirements apply. |
| Penalty remission | Late submission or payment penalties may be remitted if there were exceptional circumstances or it is a first incidence. |
What SARS will want to see
- All outstanding returns submitted. SARS rarely agrees to arrangements while returns are missing.
- A realistic proposal backed by financial information: bank statements, management accounts and a cash flow forecast.
- Evidence of why you can't pay in full right now.
This article is general information based on the law and SARS guidance as at 8 September 2026. It is not tax or legal advice for your specific situation. Please contact us before acting on it.
