What Happens if You Don’t Pay Taxes?

By Tevait Feanle •  Updated: 10/03/24 •  5 min read

Failure to pay due tax types in South Africa is a criminal offence. However, there can be many reasons that people have become non-compliant, and SARS does prefer to work with people to bring their tax status into compliance, so if you have accidentally missed a tax return or found out that an employer has not paid over taxes on your behalf, don’t panic!

There’s plenty to do to remedy the situation, and SARS will typically work with you if you are willing to bring your account into compliance. Harsh penalties are typically reserved only for those actively evading paying tax. Today we will look at some common questions around not paying tax in South Africa, and what to do for specific situations.

What Happens if You Don’t Pay Taxes in South Africa?

It is, as we stated, a criminal offence not to pay due taxes in South Africa. This also means ensuring all tax returns are submitted timeously- even if the return was a 0 balance, you could earn quite severe admin penalties for failing to file it correctly. All arrears balances which are due will attract admin penalties and interest. The administrative penalty for failing to pay or file a return starts at R250, and can be as high as R16,000, depending on the time for which it has not been paid and the tax type. As of the 2024 tax year, all grace periods to bring your tax into compliance have expired. 

If you have discovered an unfiled return or unpaid bill by mistake, the sooner you address the issue, the lower these penalty fees will be, although you can still expect to pay some punitive costs. SARS are typically willing to work with taxpayers to bring accounts into compliance, so it is better to deal with the matter head-on rather than evade it further unless you are willing to risk criminal judgements and possibly jail time when they catch up with you.

Can you go to Jail for Tax Evasion in South Africa?

Both tax evasion and tax fraud can carry jail time in South Africa, with a maximum prison sentence of 5 years. You will also attract punitive fees and interest on balances owed. Remember, however, that SARS would rather see you bring your account into compliance than pursue criminal charges against you, especially if the error was honestly made. You can discuss the issue with them, and possibly enter a repayment plan, to address the issue.

How Many Years Can You Legally Not File Taxes?

If you are earning above the tax threshold, there is no amount of years you can legally not pay taxes in South Africa. You may not need to file an income tax return, however, if all of the following criteria apply:

Of course, SARS do not particularly care about the last two points if you fail to utilise them to your advantage! They will simply take the higher tax amount provided your employer has been paying it over as PAYE on your behalf and you will miss the chance to make those allowances or deductions work for you.

How Much Do You Have to Earn to Not Pay Tax in South Africa?

To not pay tax in South Africa, all of your combined income must come in under the tax threshold. That is R91,250 per annum in the 2022/23 tax year, and is adjusted annually or bi-annually. This includes wages and salaried income as well as supplemental income from side gigs, rental, investments, and other sources. 

How to Pay Unpaid Taxes

If you have become non-compliant with SARS, the first step they will require from you is to bring all missing/unfiled returns up to date on their system. This allows them (and you) to see the full picture of unpaid taxes due to them. You can then request a statement of account from them and make a plan to bring the amounts up to date and your account into compliance.

If there are amounts you wish to dispute, you can lodge a dispute with them. You will then have 7 days to pay all due amounts, or you will need to offer a request for a payment plan with a supporting reason. Once this is in place, you will need to pay the agreed amount monthly until your backlog is cleared.

While it can be scary to owe ‘the taxman’ money, it is always best to address your non-compliance issues and bring your accounts into compliance rather than running from the problem. Remember that SARS are typically willing to help you address the issues and become compliant, and will not usually enact criminal penalties unless you are deliberately evading taxes, or force them to ‘come looking for you’ rather than openly declaring your intention to remedy the situation.

Keep Reading

How to Check for Agent Appointment on SARS eFiling

How to Check for Agent Appointment on SARS eFiling

How to Check for Agent Appointment on SARS eFiling. Today we walk you through everything you need to know about the process.

How to Pay SARS eFiling On Absa

How to Pay SARS eFiling On Absa

How to Pay Sars eFiling On Absa. We will cover the SARS payment options and other related matters dealing with SARS payments.

How to Accept SARS Auto Assessment

How to Accept SARS Auto Assessment

This article will provide all the details you need about this new system and a step-by-step walkthrough on accepting your SARS auto assessment.

How to Report Tax Fraud

How to Report Tax Fraud

You can do this by taking different measures. Read on to learn how to report tax fraud.    

How Long Does SARS Take To Pay After Audit?

How Long Does SARS Take To Pay After Audit?

How Long Does SARS Take To Pay After Audit? .This article explains different things you should know about SARS audits. 

How to Apply For a SARS Tax Number

How to Apply For a SARS Tax Number

Apply For a SARS Tax Number. In this article, we will learn about SARS and its taxation, how to get your SARS number.

What Happens After Submitting Your Tax Return?

What Happens After Submitting Your Tax Return?

Today, we'll explore what happens to your tax return after you click ‘submit’,  and what you can expect to hear from SARS.

Reasons You Still Need to File Your Tax Return 

Reasons You Still Need to File Your Tax Return 

Reasons You Still Need to File Your Tax Return. Here are some good reasons why you should file your tax return

What Is The Tax Threshold In South Africa 2024?

What Is The Tax Threshold In South Africa 2024?

Understanding the tax threshold is an integral part of financial planning.. Read on to find out all the details about the tax threshold in South Africa

How to Become A Tax Practitioner At SARS

How to Become A Tax Practitioner At SARS

We’re here with the details you need about becoming a tax practitioner at SARS today. 

How Much Tax Does SARS take From Your Salary?

How Much Tax Does SARS take From Your Salary?

How Much Tax Does SARS take? The most common type of tax is Income Tax. Here’s how much SARS takes from your salary.

How to Pay SARS Via FNB

How to Pay SARS Via FNB

How to Pay SARS Via FNB. In this article, we will look at how customers of FNB can pay their taxes, the timelines on tax payment, efiling process.

List of SARS eFiling Forms

List of SARS eFiling Forms

List of SARS eFiling Forms. We've compiled this guide to the various forms available on eFiling and how to access them to help you.

How to Fill SARS Travel Logbook

How to Fill SARS Travel Logbook

This article explains how you fill out your SARS travel logbook. Continue reading to learn how to fill it

What Does It Mean If Your Tax Return Is Negative?

What Does It Mean If Your Tax Return Is Negative?

Discover what it means to have a negative tax return in South Africa, how to claim your refund and avoid common delays.