South Africa Law
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The act does not specifically deal with how payment should be madce. This insistence on cash is purely to evade tax and in my view should be dealt with in two ways:
1. A complaint be lodged with the insurance company concerned or
2. You pay the cash but insist that you are provided with a receipt which you will make sure is submitted to SARS.
He should be made aware of both these options and that you will not hesitate to excercise one of them.
Please ask more if not clear.