• Posted on Jul 19, 2019

Mark Lifman case is a warning to those who ignore SARS

The recent dismissal of an urgent application by controversial business person and alleged Cape Town underworld figure Mark Lifman and his associates to hold on to their assets clearly demonstrates the perils of being passive when the taxman comes knocking.

The high court in the Western Cape’s judgment paved the way for the SA Revenue Service (SARS) to collect outstanding taxes of more than R352m from Lifman, who is said to be involved in a turf war over nightclub security with another alleged underworld figure, Nafiz Modack.

SARS has raised assessments against Lifman and more than 30 entities in which Lifman held an interest.


The first assessment for tax liabilities was issued in 2014.

Lifman and his associates made no attempt to initiate any of the dispute resolution procedures provided for in the Tax Administration Act against this assessment or any other subsequent assessment that made up the total amount. No payment was made either.

Head of tax controversy and dispute resolution at PwC Elle Sarah Rossato says taxpayers who are aggrieved by an assessment have the right to dispute it. “Inactivity until the last moment is not an option,” she says.

The procedures, rules and timelines for initiating a dispute resolution process are clearly set out in the act. Aggrieved taxpayers who do not engage in a dispute do so at their peril.

Rossato, who is also chair of the SA Institute of Tax Professionals Tax Administration Act committee, says taxpayers should be proactive.

Once they receive a request for information or a letter of findings has been issued, it is best to obtain representation to manage the response to the letter of findings correctly. This is especially true in the case where the matters are complicated and of high value.

When SARS received no objections or payments, it obtained civil judgments and warrants of execution against the property of Lifman and his associates in 2015. However, the execution process has been thwarted by two urgent applications seeking a stay of execution.

Both applications were dismissed and the latest one, heard by judge Elizabeth Baartman in the Western Cape High Court, followed suit. In this case, the parties alleged “exceptional circumstances” since SARS had undertaken to do an internal review and to reconsider the assessments.

However, the judge noted that because no attempt was made to use the dispute mechanism, the assessments remain final. “The amounts, totalling R352,235,074.29, were such that one would have expected the applicants to have availed themselves of any opportunity to dispute the proposed assessment,” she found.

Rossato says once an assessment has been raised, the taxpayer only has 30 days in which to lodge an objection. If this deadline is missed, the taxpayer may ask for an extension if reasonable grounds exist. Rossato warns that condonation for the late filing of an objection will not be extended beyond 30 days unless a senior SARS official is satisfied that “exceptional circumstances” exist.

It is clear from the latest application before Baartman that since Lifman and his associates did not lodge an objection, they could not ask for an extension. “Instead, it seems the initial dissatisfaction was about treatment received [by SARS] which the applicants have belatedly and opportunistically sought to raise to an objection against the assessments. That is not permissible,” the judge found.

SARS has 60 days to deliver a decision whether to allow, disallow or partially allow an objection. It appears that SARS rarely sticks to this time frame, Rossato says.

Taxpayers must appeal SARS decision to disallow or partially allow the objection within 30 days and have little room for an extension.


They can approach the courts to ask for an extension, but this can become a protracted and costly endeavour.

Rossato advises taxpayers to use the dispute resolution process and to file objections timeously on the eFiling platform, to select the correct codes and values under dispute, and to ensure they upload the correct supporting documents for the objection and the grounds for objection.

Taxpayers have to submit a request for the suspension of payment with their objection. In terms of the pay-now argue-later provision in the act, SARS may proceed with its collection action if no request for the suspension of payment has been made.