The judgment in Ferreira v CSARS (2024/067035) [2026] ZAGPPHC 47, delivered on 2 February 2026, confirms two propositions of immediate practical value. A section 9(1) reconsideration request under the Tax Administration Act is a strategic step that creates a reviewable record capable of addressing deficiencies in SARS' original reasoning. Where SARS refuses to suspend payment under section 164 based on facts that are demonstrably wrong, it is possible that the court will substitute the decision with its own.
The facts
SARS raised additional income tax assessments against the applicant for the 2009 to 2021 years of assessment, totalling approximately R531 million. Pending the Tax Court appeal, the applicant sought suspension of payment. He initially tendered racehorses and a cession of Siyangena Technologies (Pty) Ltd's claim against PRASA as security. SARS refused on the familiar grounds (first decision), namely jeopardy, dissipation risk, absence of irreparable hardship, fraud, and inadequate security.
The applicant then invoked section 9(1), tendering his 80% shareholding in TMM Holdings (Pty) Ltd, valued at more than ZAR 1 billion on a discounted cash flow basis supported by audited financial statements. SARS refused again, characterising the security as "only a fraction" of the debt and repeating the same grounds (second decision). The applicant brought a review application of the second decision under the Promotion of Administrative Justice Act (PAJA).
Why the refusal did not survive review
The characterisation of the security as a fraction of the debt was factually unsustainable. SARS admitted in its answering affidavit that the TMM shareholding exceeded ZAR 1 billion, nearly double the amount owed. Once pledged, the shares would be in SARS's possession and incapable of dissipation. The court found that SARS had taken irrelevant considerations into account under section 6(2)(e)(iii) of PAJA. The decision also lacked rational connection to the information before the decision-maker under section 6(2)(f)(ii).
The second ground was procedural and more damaging. The applicant averred that the debt management committee had not been informed of the TMM shareholding before deciding. SARS' denial was bare and unsupported by facts. Applying the principle in Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T), the court accepted the applicant's version. The committee determined a suspension request without knowing what security had been tendered, which was the very issue the decision purported to address.
On prejudice, the court found the hardship manifest and irreparable. Compliance with the pay-now-argue-later rule would have required the applicant to liquidate assets at fire-sale prices. The proceeds would not have discharged the debt. SARS could have executed against all remaining assets, compromising the applicant's business and his horse-racing operation. Any subsequent success in the Tax Court would have been meaningless.
Substitution
The court substituted its own decision under section 8(1)(c)(ii)(aa) of PAJA, granting full suspension pending delivery of the pledged shareholding within five days. Applying the guidelines in Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd 2015 (5) SA 245 (CC), the court concluded it was in as good a position as the administrator, the outcome was a foregone conclusion and the substitution was just and equitable. SARS was ordered to pay costs on the scale of two counsel.
What practitioners should take from Ferreira
A suspension of payment request must be properly motivated and financially supported from the outset. SARS will usually require annual financial statements, management accounts, and current and projected cash flow forecasts. Each factor in section 164(3) must be addressed directly, including why the payment of the disputed tax causes irreparable hardship to the taxpayer relative to the prejudice to SARS if the disputed tax is not paid or recovered. Where security is tendered, it must be properly valued and the valuation must be placed before SARS as part of the request.
A section 9(1) reconsideration request is a useful and often underused intermediate step before proceeding to a more costly High Court review application. The request allows the taxpayer to place corrected or additional information before SARS and to address factual errors in the refusal letter. It compels a fresh decision that must withstand scrutiny on its own terms. Perhaps most importantly, it creates a record that exposes whether the decision-making body was properly informed, as the Ferreira case demonstrated. It also provides the taxpayer an opportunity to request adequate reasons for the SARS decisions.
Where SARS persists in a refusal that cannot be reconciled with the facts, review proceedings under PAJA and legality remain available. Ferreira confirms that a refusal built on a factual mischaracterisation of the security tendered, compounded by a failure to place material information before the decision-making body, is unlikely to survive judicial scrutiny. The discretion to refuse suspension is not a discretion to ignore the facts. Where SARS exercises it as though it were, this decision demonstrates that courts can step in and decide the matter themselves.
