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September 5, 2025

A critical analysis of third-party personal liability for tax debts in ss 183 and 184 of the Tax Administration Act 28 of 2011

Key Points

Taxpayer rights may be affected by third-party personal liability provisions in the Tax Administration Act.
The findings show that uncertainties exist surrounding terms like 'tax debt' and 'dissipation of assets.'
The analysis offers guidance for policymakers and tax authorities on improving the clarity of procedural steps.
Proposed refinements to the Act aim to enhance fairness and efficacy in the tax system for all stakeholders.

Abstract

Third-party personal liability provisions are contained in ss 183 and 184 of the Tax Administration Act 28 of 2011. Based on jurisdictional requirements, specific areas of uncertainty were identified and motivated the purpose of the article to investigate such uncertainties to offer guidance for taxpayers, policymakers, and tax authorities. The objectives of the article were to investigate the meaning of certain terms (‘tax debt’ and when such a tax debt would arise, ‘dissipation of assets’, ‘knowingly’, and ‘same rights against the powers of recovery’) and to investigate the alignment of the third-party personal liability provisions with the fundamental principles of equity and certainty as advocated by Adam Smith. Based on the findings, the article proposes refinements to ss 183 and 184, including guidance on the necessity of assessments, the clarification of procedural steps, and the establishment of comprehensive frameworks for imposing personal liability. These recommendations aim to enhance clarity, efficacy, and fairness, contributing valuable insights to ongoing discussions on taxpayer rights and the equitable functioning of the tax system.

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