Sections 180, 184(2) and 186(3) of the Tax Administration Act 28 of 2011 (TAA) grant the South African Revenue Service (SARS) significant powers to recover tax debts from third parties responsible for a taxpayer’s failure to pay outstanding tax debts. In the recent case of Greyvensteyn v Commissioner for South African Revenue Service and Others (B2495/2023) [2025] ZAGPPHC 128, the applicant unsuccessfully challenged the constitutionality of these provisions. The High Court dismissed the application and emphasised that, while SARS’ powers and duties of recovery of taxes are not absolute, the recovery of taxes is crucial to ensure that the public benefit and public interest are served.

Background

SARS sought to hold the applicant, Mr Greyvensteyn, personally liable for approximately R3 billion of tax debts of Gold Kid Trading (Pty) Ltd (Gold Kid). This was on the basis of section 180 of the TAA and the applicant’s control and/or regular involvement in the management of the overall financial affairs of Gold Kid.

In February 2023, SARS obtained an order against the applicant and Gold Kid for the preservation and repatriation of their assets in terms of sections 163 and 186 of the TAA (the order). The order also required the applicant to surrender his passport to the curator bonis appointed to preserve the assets.

Although the applicant disputed SARS’ claims against him, his application in this case pertained not to the dispute but to the constitutionality of sections 180, 184(2) and 186(3) of the TAA.

Constitutionality of SARS’ powers to determine a third party’s liability

The applicant contended that section 180, read with section 184(2) of the TAA, allows SARS to resort to self-help, as SARS is tasked both with investigating and making a finding on whether a third party is personally liable for a taxpayer’s tax debts. This, according to the applicant, undermines the right to access court, as the jurisdiction of the Tax Court is excluded, since liability under section 180 does not arise from an assessment, and SARS’ finding can only be reviewed and not appealed.

The court rejected the applicant’s argument and emphasised that SARS’ decisions under sections 180 and 184(2) of the TAA amounted to administrative action for purposes of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). Not only must SARS provide a third party with an opportunity to make representations prior to making a decision (protecting the third party’s audit alteram partem right), but the decision itself is subject to judicial review of both its process and substance, and potentially also to appeal.

Accordingly, the court found that section 180 read with section 184(2) of the TAA does not oust the jurisdiction of a court and does not infringe on section 34 of the Constitution.

Constitutionality of the repatriation and travel restriction provisions

Regarding the challenge to section 186(3) of the TAA, the court noted that the effect of the order was to limit the applicant’s ability to travel outside South Africa, and to prevent him from dealing with his assets. This limited the applicant’s rights in sections 21 and 22 of the Constitution.

While recognising that the rights to freedom of movement and freedom of trade hold an important place in our constitutional order, the court emphasised that the effective and efficient recovery of taxes (by restricting persons from dealing with assets and leaving South Africa to escape tax liabilities) is vital to maintain the fiscus in South Africa and ultimately to serve the public interest.

Having regard to the safeguards accompanying the order, such as the appointment of a curator bonis, and the fact that less restrictive means were not likely to have been effective in this case, the court found that the limitation of sections 21 and 22 of the Constitution by section 186(3) of the TAA was reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, and therefore passed the test in section 36(1) of the Constitution.

Conclusion

This judgment confirms that while SARS’ powers and duties of recovery of taxes are not absolute, the third-party liability and repatriation provisions of sections 180, 184(2) and 186(3) of the TAA are lawful and constitutional. SARS will be happy to be able to bring home (and keep home) the bacon.