If you do enough tax dispute resolution work, you start recognising a familiar pattern: SARS declines suspension of payment (“SOP”) applications quickly, and often (but not always) for reasons that can only be described as dubious. “Jeopardy.” “Dissipation.” “No hardship.” “Inadequate security.” Often allegations with little factual backing. Tick-box conclusions, delivered with the confidence of a decision-maker who either thinks they are right or knows you probably won’t (or can’t) fight back. Taxpayers, in my experience, feel frustrated and helpless because the pay-now-argue-later rule is real, immediate, and brutal. But now we have a High Court judgment that, on my reading, not only exposes why SARS may have been declining SOP requests seemingly so easily in practice — it may also make SARS think twice before doing so again.
The case is Ferrerìa v CSARS (Gauteng Division, Pretoria, Case No. 2024-067035) — a judgment delivered by Dyke AJ on 2 February 2026. It is a review application aimed at setting aside SARS’ refusal, under section 9 of the Tax Administration Act, to reconsider its earlier decision under section 164 refusing to suspend payment of R531,082,580.51 pending the Tax Court dispute.
The facts
SARS raised additional income tax assessments for the taxpayer’s 2009–2021 years of assessment. Pending the outcome of that dispute, the taxpayer asked SARS to suspend payment in terms of section 164 of the TAA. The taxpayer initially tendered racehorses as security and later a cession involving a claim against PRASA. SARS considered that security inadequate and refused the first SOP request, giving reasons including alleged jeopardy, dissipation risk, “inadequate security”, and prejudice to SARS outweighing hardship.
The taxpayer then tried again. To address SARS’ stated concerns, he tendered additional security: his shares in TMM Holdings (the “TMM shareholding”), valued at more than R1 billion, and asked SARS — under section 9(1) — to reconsider the first refusal. SARS refused again (“the second decision”), stating (amongst other things) that the security offered was “only a fraction” of the debt, and repeating the jeopardy/dissipation and “prejudice outweighs hardship” refrain.
The taxpayer’s case
A key plank of the taxpayer’s argument was a simple piece of logic: if the court accepts as fact that the TMM shareholding exceeds R1 billion, then the “correct facts” follow — the security is adequate, and suspension would not put recovery “in jeopardy” or create a dissipation risk in any meaningful sense. In other words, once the security is accepted, the standard “SARS buzzwords” collapse under their own weight.
SARS’ defence
In my view, SARS’ litigation approach is the most revealing part of this case. SARS raised an in limine point that the review was “fatally defective” because it allegedly didn’t properly locate SARS’ decision-making within PAJA review grounds, and instead “focussed” on section 164. SARS repeated the point, complaining the taxpayer “merely concludes” the decisions are reviewable without explaining how they fit within section 6(2) of PAJA. The court rejected that “fatally defective” thesis.
To be fair to SARS, it also leaned on the familiar section 164 factors: it said the taxpayer had not shown financial prejudice or irreparable harm if required to pay pending appeal (at para 40); it relied on the taxpayer’s compliance history (at para 42); and it alleged prima facie fraud (at para 43) — all aimed at justifying a refusal to suspend payment.
But SARS’ bigger play, it seems to me, was to narrow the enquiry to procedural fairness/audi. The court records it plainly: “As I understand the respondent’s case, it is confined to” whether the refusal was founded on procedural fairness and the audi rule (at para 55). SARS contended the taxpayer bore the onus to prove he was not afforded a fair opportunity to present evidence in support of suspension and that his rights were transgressed (at para 56). And the court acknowledged SARS’ point that the taxpayer effectively got the proverbial “second bite at the cherry” via section 9 (at para 71). The court even said: “At first blush, this would appear to be the end of the matter.” (at para 72). But it immediately added it was “not … convinced” that the enquiry ends there (at para 73).
Now to the fact that, to me, speaks volumes: SARS admitted in its answering affidavit that the value of the TMM shareholding exceeds R1 billion (at para 66). The court later refers to that concession as a “highly relevant factor” (at para 77.1).
And it matters because it makes the rest of SARS’ stated reasons for declining the second request extremely hard to defend without a coherent explanation tied to the pledged shares — and the court found that explanation simply wasn’t there.
What the court decided
The court held that, in reaching the second decision (i.e., refusing to reconsider after more-than-adequate additional security was offered), SARS took irrelevant considerations into account and ignored relevant ones. It made several pointed findings:
- SARS’ concession on value was “highly relevant”, and “By no means can this tender of security be considered as inadequate.” (at para 77.1).
- Given the value and nature of the security, the court said it was “unable to understand” SARS’ “jeopardy” claim; one would expect an explanation tied to the pledged shares — “This is nowhere to be found” (at para 77.2).
- The dissipation point was described as “confounding”, because a pledge is a real security right: once the shares are delivered to SARS, the taxpayer cannot dissipate them (at para 77.3).
- The court said the only conceivable prejudice to SARS would be cash flow, while the prejudice to the taxpayer would be severe: forced “fire sale” liquidations, irrecoverable loss, potential destruction of business and livelihood — and that irreparable harm was not properly considered (at para 77.4).
The court also found the second decision was procedurally unfair on the record before it — the IDC could not have been informed of the TMM tender when the section 9 request was declined; and even if that was wrong, SARS still didn’t give the taxpayer an opportunity to explain the increase in the shares’ book value or provide substantiating documentation, and SARS raised no such concerns (at para 79).
Ultimately, the court concluded the taxpayer established review grounds (and that the second decision ought to be set aside; it added that even a legality review would also have succeeded (at para 80).
On remedy, the court went further than referring the decision back to SARS for reconsideration. It held that the central issue was the tender of the TMM shareholding as security, that it was in as good a position as SARS to decide it, and that SARS’ decision to reject the application was a “foregone conclusion” — and therefore the court substituted its own decision (at para 88): suspension is granted subject to the taxpayer delivering a pledge of his 80% shareholding in TMM within 5 days (at para 91).
The bigger point: SARS appears to think it can’t be held to account?
Here is the bottom line message — and this case is, on my reading of the judgment, a strong example: it seems SARS has been quick to decline suspension of payment applications in practice because it appears to think it can’t be held to account or at least, that its decision can’t be taken on review.
That “institutional stance”, as I perceive it, comes through in the way SARS tried to make their defence on this review case effectively live or die on a single proposition: we gave you the process, therefore our refusal is safe. SARS’ position, as the court understood it, was “confined” to audi/procedural fairness, reinforced by the “second bite at the cherry” framing.
That their case lived or died on this proposition is especially telling given SARS’ concession in its answering affidavit regarding the value of the tendered security. In my mind, this concession creates the impression that SARS believed it could win without confronting the substance of the section 164 enquiry — because almost all the other “reasons” for refusal collapse once the value is accepted. If you know that, why concede the value? The most plausible explanation is that SARS expected the dispute to be decided on the narrow “not reviewable / you were heard” angle alone.
If that were the law, SARS’ SOP refusals would be practically final as long as SARS can point to an application process — regardless of whether the reasons for refusal are coherent.
But the court’s answer is instructive: procedural participation is not a forcefield. An opportunity to be heard does not immunise a refusal that ignores plainly relevant considerations and cannot rationally explain its own conclusions — especially where SARS has itself conceded the key fact that makes its “inadequate security/jeopardy/dissipation” narrative unsustainable.
In my view, if SARS takes this judgment seriously, it should slow down on what is possibly, in some cases, reflexive “no” responses to SOP requests and start doing what section 164 actually demands: rational, fact-based weighing of the relevant factors — and reasons that can survive being tested in court.
Practical takeaway: when bringing SOP requests, put the section 164 factors front and centre — credible security (with valuation support), a dissipation-proof structure, and concrete evidence of irreparable hardship — and, if SARS refuses on slogans rather than reasons, consider a section 9 reconsideration and (where appropriate) review proceedings.
