How to Dispute or Object to a SARS Penalty Assessment

How to Dispute a SARS Penalty Assessment

If you believe a SARS penalty has been incorrectly assessed, you have the right to dispute it through a formal objection process under Section 104 of the Tax Administration Act.

Common grounds for disputing a penalty include: the penalty was calculated on the wrong amount, the behaviour classification is incorrect (for understatement penalties), the return was in fact submitted on time, or the penalty period is wrong.

Step 1: Review the Assessment

Before lodging an objection, carefully review the penalty assessment notice. Check:

• The penalty type and amount — does it match what you expect based on the relevant rules?
• The tax period — is SARS penalising you for the correct period?
• The underlying facts — has SARS used the correct taxable income, liability amount, or behaviour classification?
• The dates — are the due date and submission/payment dates correct?

Use our penalty calculators to verify the amount SARS has charged against the official penalty tables.

Step 2: Lodge an Objection

An objection must be lodged within 30 business days of receiving the assessment. You can do this through:

• SARS eFiling — use the "Dispute" function on the relevant assessment.
• In person — visit a SARS branch and complete the NOO (Notice of Objection) form.

Step 3: What to Include

Your objection should include:

• The specific assessment you are objecting to (assessment number)
• The grounds for your objection — be as specific as possible
• Supporting documentation (proof of submission, bank statements, correspondence, etc.)
• The outcome you are seeking (penalty to be reduced to X, or penalty to be waived entirely)

Step 4: SARS Response and Escalation

SARS must respond to your objection within a reasonable time. The possible outcomes are:

• Objection allowed — the penalty is adjusted as requested.
• Objection partially allowed — the penalty is reduced but not fully waived.
• Objection disallowed — if you disagree with SARS's decision, you can escalate to an appeal before the Tax Board (for amounts under R1 million) or the Tax Court (for larger amounts).

The appeal process is more formal and may require legal representation. Consider consulting a tax practitioner or tax attorney before escalating to an appeal.