Tax litigation has long played an important role in South Africa’s dispute resolution framework. For many years, this was both necessary and effective, particularly at a time when administrative processes lacked consistency and litigation introduced discipline into a system that required it.
André Daniels
Head of Tax Controversy & Dispute Resolution
However, the landscape has changed.
What was once a mechanism to resolve disputes by focusing on the underlying tax issues has increasingly given way to a model driven by procedural manoeuvres, exceptions, and technical arguments that can extend proceedings over several years.
The reality is that this approach benefits very few parties: It does not benefit the South African Revenue Service (SARS), it does not benefit taxpayers, and it does not necessarily lead to meaningful resolution.
This raises a fundamental question: is this the right approach for tax disputes in South Africa, where every rand matters – for taxpayers, who should pay what is legally due (not more and not less), and for SARS, where efficient revenue collection helps to build a capable state that enables service delivery?
The Rise of Procedural Litigation
Recent Tax Court and Appellate Division judgments illustrate a growing focus on procedural compliance. Courts are frequently required to determine issues such as condonation, adherence to timelines, and whether parties are entitled to advance particular arguments at specific stages.
While these matters are legally significant, they do not resolve the underlying tax dispute.
The Supreme Court of Appeal’s decision in Commissioner for SARS v Erasmus (2026) confirms that SARS may not fundamentally alter the factual basis of its case during litigation. Similarly, in Baseline Civil Contractors (2026), the Court reaffirmed that the grounds of objection define the dispute and cannot later be replaced.
These judgments reinforce the important principle that disputes must be properly framed from the outset. At the same time, they highlight a broader concern. Increasingly, disputes are being determined on procedural grounds rather than on their substantive merits.
When Process Overtakes Substance
In too many cases, disputes that should be resolved on the underlying tax position are instead becoming protracted battles over procedural steps, deadlines, and technical compliance with litigation rules.
The focus becomes how the case is framed, rather than what the correct outcome should be. The result is predictable. Timelines extend, costs increase, and the underlying issue remains unresolved for extended periods.
This is not a criticism of litigation itself. Litigation remains essential, particularly where matters of principle must be determined. However, where it becomes an end in itself, rather than a means to resolution, its effectiveness is diminished.
Strategic Decisions Made Early
Recent High Court and Tax Court judgments published by SARS, including those within the 2023 to 2026 reporting cycles, illustrate how strictly the dispute framework is applied. Matters have been dismissed or materially impacted due to procedural non-compliance, reinforcing the importance of correctly framing disputes from the start.
For taxpayers, the implications are significant. The way a dispute is approached at the outset, how the objection is framed, how engagement is conducted, and whether litigation is treated as a first or last resort, will often determine the trajectory of the entire case.
In our experience, disputes that begin with a clear focus on resolution tend to reach finality more efficiently. By contrast, once cases become entrenched in procedural litigation, extracting a practical outcome becomes more difficult.
A Growing Need for Strategic Reassessment
Tax litigation remains a necessary tool, but it has evolved.
The key question is about how and when litigation should be used. In our experience, the most effective outcomes are achieved where litigation is applied strategically, and unnecessary procedural disputes are avoided in favour of resolving the substantive issue.
This is reflected in taxpayer behaviour. More taxpayers are seeking a second, independent view early in the dispute process. This s not to avoid litigation entirely, but to ensure that it remains aligned to a defined outcome rather than becoming a process without direction.
Litigation remains vital, particularly where matters of principle must be determined. However, it should not be the default approach but rather weighed against other mechanisms to secure a meaningful resolution.
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