Where tax disputes are approached with clarity of facts and properly articulated legal positions, there is often scope for constructive engagement. This does not eliminate disagreement, but it allows for a structured progression toward resolution.
The Discipline of Early Definition
Of late, jurisprudence has reinforced that disputes must be properly defined at an early stage. The Supreme Court of Appeal in Baseline Civil Contractors (2026) confirmed that a taxpayer cannot introduce a new ground of appeal not raised in its objection. Similarly, Commissioner for SARS v Erasmus (2026)confirmed that SARS is bound by the basis of its assessment. This reflects a consistent judicial position. The dispute is set early, and both parties are bound by it.
The Implications of a Fixed Dispute Framework
This has significant practical consequences. If the dispute is effectively fixed at the objection stage, the opportunity to influence its outcome arises far earlier than litigation would suggest. The emphasis shifts from how the matter is argued in court to how it is framed from the outset.
At the same time, SARS continues to operate under pressure to address non-compliance and secure revenue collection, creating a practical incentive to resolve disputes efficiently where appropriate.
The Reality of Escalated Disputes
Having said that, we are increasingly engaged in matters that have already escalated, often over several years. In many of these cases, the underlying tax issue remains unresolved despite extensive procedural activity. The dispute has progressed, but it has not necessarily advanced.
Resetting the Approach
In such circumstances, a reset in approach can be highly effective. This involves revisiting the core issue, reassessing the litigation trajectory, and re-engaging SARS in a structured manner. Where done effectively, it is often possible to unlock progress that had previously stalled.
With SARS under pressure to collect revenue, there is a clear incentive to resolve matters efficiently, rather than engage in prolonged litigation that delays collection.
In practice, meaningful engagement with SARS, when undertaken properly, can lead to efficient and commercially sensible outcomes. Increasingly, disputes that might previously have escalated into litigation are now being resolved through structured interaction with SARS.
Engagement as a Strategic Mechanism
Engagement is not a compromise of principle. It is a strategic mechanism. When properly executed, it allows disputes to be addressed on their substantive merits, without being overshadowed by procedural complexity.
Taxpayers should therefore be cautious before entering into prolonged litigation. In many cases, there are more effective ways to resolve disputes, particularly where both parties are willing to engage constructively.
We believe the future lies in a balanced approach: one that retains litigation as a tool where necessary but prioritises efficient resolution through engagement wherever possible.
