Abstract

The Pay Now Argue Later principle is central to the administration of taxes in many jurisdictions. The principle requires that an aggrieved taxpayer wishing to object or appeal decisions of the revenue authority should pay the tax liability imposed for the very assessment they wish to contest. In its rudimentary form, Pay Now Argue Later posits that the aggrieved taxpayer’s liability is undisputed and the outcome of their objection or appeal can only result in a variance of the liability undoubtedly imposed. This note examines the Botswana and South African approach to the principle of Pay Now Argue Later. The examination of the said notion is in the Income Tax Acts and Value Added Tax Acts of both jurisdictions. This note concedes that although the rule is often riddled with criticism and speculations of the inherent ‘unfairness’, it is a necessary tool for the revenue authorities to effectively perform their duty without room for the taxpayer to use frivolous and vexatious tactics to avoid tax liability. In light of this, this note seeks out the ‘best’ way to apply the principle with regard to the taxpayers’ rights and the revenue authority’s rights. The note posits that the South African perspective can provide a platform for Botswana to learn and appreciate a better way to apply the Pay Now Argue Later rule regarding the rights of the parties involved and the legitimacy of the objections and appeal process.