Does the ‘pay now, argue later’ approach in the Tax Administration Act 28 of 2011 infringe on a taxpayer’s right not to be deprived of property arbitrarily?

Abstract

The Davis Tax Committee declared that the ‘pay now, argue later’ approach in the Tax Administration Act 28 of 2011, which applies when a taxpayer disputes an assessed tax liability, infringes on a person’s right not to be deprived of property arbitrarily as entrenched in s 25(1) of the Constitution of the Republic of South Africa, 1996 (the property clause). In this article we set out to analyse whether this is indeed the case by first outlining the legislative provisions pertaining to the ‘pay now, argue later’ approach and the jurisprudence surrounding the right not to be deprived of property arbitrarily. Thereafter, we evaluate whether the ‘pay now, argue later’ approach complies with the requirements for a valid deprivation of property and conclude that this approach does not infringe upon the rights of taxpayers in terms of the property clause. We show that the statutory provisions surrounding the ‘pay now, argue later’ approach impose a deprivation of property, but that the deprivation is neither procedurally nor substantively arbitrary.