SARS Expedited Tax-Debt Compromise Process: A One-Time Chance to Settle Tax Debt

1 Oct

This article will count 0.25 units (15 minutes) of unverifiable CPD. Remember to log these units under your membership profile.

Paying tax is not negotiable, but SARS recognises that many taxpayers are under severe financial strain and unable to settle their full outstanding balances. To address this, SARS has launched a Expedited Tax Debt Compromise Process, partnering with CIBA and other Recognised Controlling Bodies (RCBs), giving qualifying taxpayers a one-off opportunity to settle long-overdue tax debts at a reduced amount. While this expedited process currently prioritises RCB-linked practitioners and their clients, SARS has indicated that the lessons learned will be used to enhance the broader compromise system in future. For taxpayers who fail to engage, SARS has confirmed that normal enforcement actions including civil judgments and writs of execution will continue to apply.

The Expedited Tax-Debt Compromise Process is based on the compromise of tax debt provisions in the Tax Administration Act (TAA), sections 194–204, which allow SARS to accept partial settlement under certain conditions. The difference is that SARS has now streamlined the process to make it quicker and easier, with strict deadlines.

What is a Compromise?

In terms of the TAA, a compromise is a written agreement between SARS and a taxpayer in which SARS agrees to accept a reduced amount as full and final settlement of a tax debt. The taxpayer admits the debt but proves they cannot pay it in full.

SARS will only agree to a compromise if:

It is in the best interest of the fiscus (i.e. SARS will recover more than through enforcement), and
The taxpayer’s financial position shows they cannot pay the debt in full.

Once the taxpayer pays the agreed amount and complies with the terms, SARS waives the balance of the debt. If the taxpayer defaults or fails to remain compliant, SARS can reinstate the full debt.

Who Qualifies?

The Expedited Tax-Debt Compromise Process is not open to everyone. SARS will only consider applications from tax practitioners where:

The debt is older than 12 months.
The debt is not under dispute (unless the dispute is formally withdrawn).
The taxpayer is not insolvent, deceased, or in final deregistration at CIPC.
The debt did not arise from fraud or criminal conduct.
The debt is not already under suspension, temporary write-off, or business rescue.
All tax returns are filed and up to date, even if payment is outstanding.
The taxpayer can demonstrate through disclosure that paying in full is impossible.

Applications will also be refused if:

The taxpayer had a compromise in the past three years (TAA section 200).
The compromise would unfairly prejudice other creditors (unless they consent).
The taxpayer has the means to pay but refuses to do so.

What SARS Requires

To apply, taxpayers must provide a complete financial picture (TAA section 201):

Statement of assets and liabilities at market value.
Income and expenditure for the past 12 months.
Details of assets disposed of in the last three years.
Disclosure of future or contingent interests in assets.
Details of assets under the taxpayer’s control (including through trusts).
Current and projected income for the next three years.
A written motivation for the compromise, including a proposed settlement.
Supporting evidence (bank statements, financials, budgets, creditor letters).

How the Rapid Compromise Campaign Works

SARS has committed to speeding up the process:

Phase 1 – Tax Practitioners to Submit Their Expressions of Interest (EOIs) - this phase falls away on 13 October 2025

Tax practitioners should review their clients and confirm with them whether they want to participate.
Include the names and tax numbers of the taxpayers who with to apply in an EOI which must be sent to Compromisecampaign@sars.gov.za. You can use the attached template EOI to send to SARS. Please note, that after 13 October 2025 you do not need to email an EOI, you can submit your application via email to SARS.
NOTE: the Compromisecampaign@sars.gov.za email is set up to receive EOIs and applications and it is not a channel for queries. Please raise your queries on this process w

Phase 2 – Formal Applications:

Applications open 1 October to 31 December 2025.
Applications must include full supporting documents.
Settlements can be once-off or in instalments (maximum of six months).

Assessment:

SARS has established a centralised committee to review applications.
Qualifying applications will be finalised within four weeks.

Final Word

The Expedited Tax-Debt Compromise Process offers taxpayers a way to regularise their tax affairs on favourable terms, but only if they act quickly and honestly.

Expressions of interest are open now. Formal applications close on 31 December 2025. After that, SARS has made it clear: enforcement will escalate against taxpayers who ignore the campaign.

If you or your clients qualify, this may be the best chance to resolve long-overdue tax debt once and for all.