The end of taxpayer confidentiality? Gauteng Division hands down potentially groundbreaking judgment

On 16 November 2021, the Gauteng Division of the High Court, Pretoria handed down a potentially groundbreaking judgment in the matter of Arena Holdings (Pty) Ltd t/a Financial Mail and Others v South African Revenue Service and Others (Case No 88359/2019) (unofficial citation and as yet unreported), pertaining to taxpayer information confidentiality.

18 Nov 2021 5 min read Tax & Exchange Control Alert Article

At a glance

  • The Gauteng Division of the High Court declared sections 67 and 69 of the Tax Administration Act unconstitutional and invalid to the extent that they restrict access to taxpayer information and prohibit further dissemination of information obtained through a request under the Promotion of Access to Information Act.
  • The court held that taxpayer secrecy is not essential for effective tax administration and that the limitations on access to information and freedom of expression imposed by the Tax Administration Act are not justified.
  • The judgment has implications for taxpayer confidentiality, potentially allowing greater access to taxpayer information and challenging the absolute bar on disclosure. However, the full impact will depend on further legal proceedings and potential confirmation by the Constitutional Court.

The court held, amongst other things, that sections 67 and 69 of the Tax Administration Act, 28 of 2011 (TAA) are unconstitutional and invalid to the extent that:

  • they preclude access to information being granted to a requester in respect of a tax record in circumstances where the requirements set out in subsections 46(a) and (b) of the Promotion of Access to Information Act, 2 of 2000 (PAIA) are met; and
  • they preclude a requester from further disseminating information obtained as a result of a PAIA request.

The judgment will undoubtedly be the subject of debate for many months to come, but in this article, we will briefly discuss the court’s analysis of the relevant TAA provisions regarding taxpayer confidentiality and some of the practical implications of the judgment for taxpayers.


  • The applicants’ case was generated by the requests for access to the IT12 documents (tax returns) relating to Mr Jacob Zuma, for the years that he was President of South Africa.
  • The applicants relied on the averments extracted from a book published in October 2017, titled The President’s Keepers and written by Jacques Pauw.
  • The averments relied on by the applicants in their papers regarding Mr Zuma’s tax affairs during his presidency are the following:
    • that Mr Zuma did not submit tax returns at all for the first seven years of his presidency;
    • that he owed millions of rand in tax for the fringe benefits he received because of the so-called security upgrades to his Nkandla residence;
    • that he received various donations from illicit sources - alleged to be tobacco smugglers, Russian oligarchs and the Gupta family:
    • that he had drawn a six-figure ‘salary’ as an ‘employee’ of a Durban security company for the first few months of his Presidency (it appears that he had subsequently paid the money back in response to queries);
    • that Mr Zuma had appointed Mr Tom Moyane as the SARS Commissioner to undermine the institution’s enforcement capability and to prevent it from prosecuting Mr Zuma for non-payment of taxes and other financial malfeasance, and from investigating people linked to him; and
    • that it was not clear whether Mr Zuma was tax-compliant at the time of publication and that it was probable that SARS was not taking steps to extract the tax he owed.
  • Based on these allegations, some of which are confirmed or corroborated by the findings of the Nugent Commission, the applicants aver that “credible evidence” exists that Mr Zuma was not tax-compliant while he was president.
  • In SARS’ opposing affidavits and in arguments presented on its behalf, it pleaded “agnostic” to the tax affairs of former President Zuma, based on its obligations not to disclose the tax affairs of any taxpayer in terms of section 69 of the TAA and in circumstances as the present.
  • The applicants argue that the tax compliance of South African head of state, where accusations of non-compliance are in the public domain entitle them to invoke their rights of access to information and if those rights are statutorily limited, to challenge the constitutionality of those limitations.


  • The court held that SARS’ argument that without taxpayer secrecy, tax administration cannot properly function, is not a universal truth.
  • The court noted that the expert research relied on by the parties reflected that in those tax regimes where there is less taxpayer secrecy, tax administration is neither hampered nor prevented thereby.
  • The court referred to various academic writings which in its view, cast some doubt on SARS’ assertion that voluntary compliance, at least as far as disclosure goes, is dependent on the secrecy “compact” written in law.
  • In the court’s view, there is no direct or factual evidence that taxpayers in South Africa rather make disclosure of their affairs because of the secrecy provisions as opposed to the coercion of the penalties and sanctions which follow upon disclosure.
  • In light of the applicants’ arguments that the “public override” requirements in section 46 of PAIA should apply to taxpayer confidentiality, where there is reason to believe that the disclosure of the taxpayer information would reveal evidence or failure to comply with the law, the court considered the constitutionality of sections 67 and 69 of the TAA.
  • In considering the constitutionality of sections 67 and 69 of the TAA, the court considered whether these sections infringed on the rights of access to information and freedom of expression, in sections 32 and 16 of the Constitution of the Republic of South Africa, 1996 (Constitution). In doing so, it also considered whether the limitation of these rights was justifiable in light of section 36 of the Constitution.
  • After undertaking this analysis, the court held that the limit imposed by the absolute taxpayer secrecy on the rights to freedom of speech and access to information, was not justifiable in the circumstances.

In other words, it held that the TAA needed to include a public interest override provision.


Firstly, the court appears to have interpreted the confidentiality provisions in the TAA as prescribing an absolute bar to the disclosure of taxpayer information. In providing the backdrop and context against which the judgment is given, the court referred to numerous provisions in the TAA, but only made mention of parts of section 69. If one considers sections 69(1) and (2) of the TAA, there is a general bar to disclosure of confidential taxpayer information, subject to certain exceptions. One of these exceptions is that disclosure of taxpayer information is not prohibited where the disclosure is ordered by the High Court. Furthermore, section 69(5) then states that the court may only grant the order if it is satisfied that specific circumstances apply. Section 69(4) of the TAA also mentions that SARS may oppose an application for disclosure on the basis that it may seriously prejudice the taxpayer concerned or impair a civil or criminal tax investigation by SARS. It is slightly strange that in its limitations analysis, the court did not consider these subsections in the TAA that provide for disclosure if certain requirements are met, in greater detail. Had it considered these provisions, the extent of the finding on constitutionality might have potentially been different.

Secondly, one must appreciate the potential effect of altering the taxpayer information confidentiality provisions as they currently stand. While the court did not agree with SARS’ arguments as to why there should not be a public interest exception to confidentiality, one can appreciate that if taxpayer information was generally available and more easily accessible by persons other than the taxpayer, taxpayers would justifiably be concerned that their personal tax information could appear in the public domain. Therefore, if the order of constitutionality is ultimately confirmed by the Constitutional Court in its current form, it is important that taxpayers understand what the potential impact will be on them.

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