“Nothing is certain except for death and taxes …” words of Founding Father, Benjamin Franklin, to Jean Baptiste Le Roy, 1789.We’re not about to expound on Wills, Trusts and Inheritance Tax, yet whilst there’s nothing friendly about paying tax, it’s what all good South African citizens do, when they are called upon to do so. So please take note …
The South African Revenue Service warns of new administrative penalties taking effect from 1 December 2022 and urges taxpayers to get their affairs in order.
Such penalties relate to the late submission of tax returns. Effective 1 December 2022, administrative penalties relating to the late submission of a tax return will be charged when one or more tax return relating to tax years from 2007 up to 2020 are outstanding.
Prior to this ruling, taxpayers were liable for late submission administrative penalties when two or more tax returns were outstanding for these tax years.
Administrative penalties are levied under Section 210 of the Tax Administration Act and prescribes the non-compliances which attracts fixed administrative penalties.
Currently penalties are imposed in respect of individuals and companies who failed to submit tax returns under the Income Tax Act:
- Individuals: for years of assessment commencing on or after 1 March 2006 and has two or more tax returns outstanding for such years of assessment.
- Companies: for years of assessment ending during the 2009 and subsequent calendar years, where SARS issued a final demand referring to the public notice and requiring the submission of the outstanding income tax return, and the company failed to submit the return within 21 business days of the date of the final demand.
Taxpayers who do not submit their tax returns will be charged an administration penalty.
Regardless of whether taxpayers agree or disagree with the admin penalty, it is advisable to submit the outstanding return to stop further admin penalties because the penalty will reoccur monthly and the returns remain outstanding for a maximum of 35 months.
The penalty for failure to submit a return comprise fixed amounts, based on a taxpayer’s taxable income, and can range from R250 to R16,000 a month for each month the non-compliance continues.
Taxpayers who disagree with the imposed penalty is welcome to submit a Request for Remission with reasons for non-compliance to be considered. Should the Request for Remission, or portion thereof, be disallowed, taxpayers who disagree with SARS’ decision have the right to appeal the outcome.
In tandem with SARS reviewing a Request for Remission, a taxpayer’s part payment may be considered, which may bring about certain transactions being settled.
Last word: To avoid late payment submission administrative penalties, do what good citizens do and make sure to submit your tax returns and address outstanding tax payments before 1 December 2022.
For more information or assistance required on tax related or penalties queries please contact us on taxmatters@pragmakonsult.com