SARS cuts a lifeline for taxpayers

SARS clarified that only obvious, factual mistakes can be corrected under the Tax Administration Act, closing a route taxpayers previously used to challenge debatable issues.

This was explained by Tax Consulting South Africa’s Head of Tax Controversy & Dispute Resolution, André Daniels, and Senior Tax Attorney, Richan Schwellnus.

They explained that taxpayers often assume that any assessment error can be swiftly corrected under section 93(1)(d) of the Tax Administration Act (TAA).

However, SARS’s latest Draft Interpretation Note (IN) on section 93(1)(d) published for public comment makes it clear that this is not the case.

“Only obvious, factual mistakes qualify, and SARS must be ‘satisfied’ before any reduced assessment is made,” Daniels and Schwellnus said.

“SARS’s new Draft IN provides long-awaited clarity on what constitutes a ‘readily apparent undisputed error’.”

This phrase governs when SARS may issue a reduced assessment. This simplified remedy is intended to correct objective mistakes without resorting to the full objection and appeal process under Chapter 9 of the TAA.

“Section 93(1)(d) was introduced to allow taxpayers to fix genuine, undisputed errors, such as miscalculations or data entry mistakes, without the cost and complexity of a formal dispute,” they said.

“However, SARS has noted that the provision has been misused to reopen substantive disagreements or revive time-barred objections.”

The Draft IN reinforces that this route applies only to clear, uncontested factual errors, and not to interpretive or debatable issues.

Daniels and Schwellnus explained that SARS must be “satisfied” that the error is both readily apparent and undisputed before it can issue a reduced assessment. This a standard that requires objective proof, not persuasion.

“Case law such as Rampersadh and Another v CSARS confirms that this discretion must be exercised reasonably and based on verifiable facts,” they said.

“The taxpayer bears the burden of proof to substantiate the request with documentation that demonstrates the mistake without further inquiry or argument.”

Clarifying key terms

Daniels and Schwellnus noted that the Draft IN interprets “readily apparent” to mean that the error must be visible at face value, and capable of being confirmed without extensive verification or interpretive debate.

“The term ‘undisputed’ requires that the mistake is not open to reasonable challenge and is accepted by SARS as factually correct,” they said. Examples include –

• A taxpayer who inadvertently duplicated a disallowed expense or entered the wrong figure from a certificate
• An incorrect donation amount where the Public Benefit Organisation reissued a corrected section 18A receipt

By contrast, they said complex reclassifications or claims requiring interpretive judgment will not qualify.

“SARS recognises that both errors of commission (doing something wrong) and omission (failing to do something) may qualify, provided they are objectively verifiable and uncontested,” they explained.

“However, taxpayers cannot use section 93(1)(d) to retroactively adjust prior assessments for later events, such as contract cancellations in subsequent years, as these do not constitute errors.”

According to Daniels and Schwellnus, SARS may process a reduced assessment under section 93(1)(d) even after the standard three-year prescription period, provided it became aware of the error before the expiry date.

Requests must be lodged in writing or via eFiling using forms RRA01 for individuals or RRA02 for companies.

Protecting both sides

“The Draft IN reinforces that section 93(1)(d) is not an alternative to formal disputes but a narrow remedy for correcting objective, uncontested mistakes,” Daniels and Schwellnus said.

“It promotes administrative efficiency while ensuring that taxpayers cannot bypass prescribed procedures.”

They added that the Draft IN reflects a constructive effort by SARS to educate taxpayers and increase transparency around administrative remedies.

“The agency’s investment in publishing detailed interpretation notes, inviting public comment, and improving taxpayer understanding is commendable and reflects a maturing compliance environment,” they said.

However, Daniels and Schwellnus added that it is reasonable to expect the volume of formal disputes to increase as taxpayers become more informed.

“Not due to confrontation, but as a natural result of greater awareness and engagement with the dispute resolution framework. This, in turn, will likely lead to a more robust and transparent compliance culture overall,” they explained.

To navigate this new system, taxpayers and tax practitioners should carefully assess whether a proposed correction meets all three criteria:

1. It is an actual error (not a difference of opinion)
2. It is readily apparent from the record
3. It is undisputed by SARS

“Where the issue requires interpretation or judgment, the proper route remains the formal objection and appeal process under Chapter 9 of the TAA,” they said,

“Taxpayers who believe an assessment contains a genuine, factual mistake should act promptly to request a reduced assessment under section 93(1)(d).”