Ntayiya v South African Revenue Service

The appellant, Mr Fikile Ntayiya, an attorney and sole director of a law firm, submitted nil personal income tax returns for the 2008–2013 tax years. Following an audit in 2014, SARS found that he had in fact earned taxable income and issued assessments totalling approximately R3.6 million, including interest and understatement penalties (USP) of 150% for intentional tax evasion. Objections and appeals under the Tax Administration Act 28 of 2011 were unsuccessful. After alternative dispute resolution (ADR), revised financial statements were submitted but did not materially reduce liability. SARS attached funds from the law firm’s bank account as security for the tax debt. The appellant approached the High Court seeking repayment of R762 335.08, but abandoned challenges to the assessments themselves. The High Court dismissed the application due to disputes of fact. On appeal to the Supreme Court of Appeal, the appellant sought repayment and leave to adduce new evidence, disputing the USP and a 10% private-use motor vehicle tax estimate.

The application to lead new evidence on appeal was dismissed with costs, including the costs of two counsel. The appeal was dismissed with costs, including the costs of two counsel.

The case affirms the finality of tax assessments under the Tax Administration Act when not properly challenged, clarifies the strict approach to understatement penalties for intentional tax evasion, and underscores that reliance on accountants does not easily establish a bona fide inadvertent error. It also reinforces the separateness of corporate entities from individuals and the stringent requirements for admitting new evidence on appeal.