SARS vs Sasfin: Court Ruling Opens Door for Financial Accountability
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The South African Revenue Service (SARS) has welcomed a recent court judgment delivered in in the Pretoria High Court in October 2025 as a key step in its case against Sasfin Bank. The case, launched in December 2023, involves a R5.3 billion damages claim. SARS alleges that Sasfin helped taxpayers illegally move undeclared funds out of South Africa.
What the Court Dismissed
Sasfin challenged SARS’s legal arguments, and the case was heard in the Pretoria High Court in October 2025. On 3 November, the court handed down a split ruling. It agreed with Sasfin on some points, mainly that existing financial laws (like the Banks Act and FICA) don’t create a legal duty for banks to protect SARS from financial loss. But on other points, the court sided with SARS. SARS argued that Sasfin owed it a common law duty of care, meaning the bank should have avoided helping clients move untaxed funds offshore. The court rejected this argument, saying that existing laws like the Banks Act, FICA, and Exchange Control Regulations do not create a private legal duty to protect SARS from financial loss. This wasn’t about poor drafting, it was a legal interpretation. In short, SARS can’t sue based on common law in this case.
What the Court Upheld
The court confirmed that SARS can still go ahead with its claim under the Financial Sector Regulation Act. It ruled that SARS has a valid statutory right to sue for losses caused by financial institutions breaking financial laws. It also said that the issue of whether Sasfin’s actions caused SARS harm should be tested at trial. This means SARS will get its day in court to argue that Sasfin broke financial laws, which led to losses for the state.
It is a Win For SARS
SARS sees this as an overall win, because it strengthens efforts to hold banks accountable for aiding financial crimes. Sasfin, meanwhile, has welcomed the court’s dismissal of what it calls the “two most serious claims,” and says it remains confident in defending the rest.
SARS is now deciding whether to update its court papers or appeal parts of the judgment. Either way, the legal fight continues, with big implications for how banks manage risk and compliance going forward.
