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SARS Penalties - 15/10/2009

posted 3 Aug 2010, 01:04 by Carl Nielsen   [ updated 3 Aug 2010, 01:04 ]

Something I thought might be of interest to everyone.

As you might know, the penalty regime relating to all manner of offenses
that taxpayers might commit has been quite radically changed. This will
mainly impact taxpayers in respect of getting tax returns in on time. The
previous system saw a maximum penalty for an individual in respect of an
annual tax return submitted late of R1200, and for a company double that.
The new regime sees much more stringent penalties with 2 particularly nasty

1. You can now end up liable for penalties even if you have no tax to pay.
Under the previous system, the penalties were based on a percentage of
income or tax with a capped maximum. Now they have implemented a banded
range of penalties which do include those with zero or negative taxable

2. The penalties, once raised, will continue to add up monthly for as long
as the return remains outstanding. The number of months they can charge is
limited, but is significant. In other words, if you're really late, the
penalties can get very high. For a company with taxable income in the top
bracket, whose return is outstanding longer than the maximum period they can
charge penalties, can end up owing something in the region of R300,000!

Since the new regime was announced, we have been in a kind of limbo (which
has been quite friendly actually) as the old penalties are gone, but the new
ones are not yet in. But SARS has now announced that the new penalties will
start from 21 November 2009.

So, if you are aware that any of your tax returns prior to the 2009 year are
not yet submitted, it is time to do something about it. If you are unsure,
please contact me and I'll check on your status and confirm.

Coinciding with the announcement that the penalties will begin now, SARS has
announced a blanket extension for all individuals who are registered as
provisional taxpayers. Your 2009 return is now only due by 28 February 2010,
which is the same date that company and trust returns are due. They've done
this to allow for an anticipated rush of old returns being submitted ahead
of the penalties kicking in. Of course if you fall into this category, you
still need to consider a topping up payment if you anticipate having to pay
in on assessment, otherwise you will be charged interest. I believe I have
analysed everyone's returns and ensured those with likely liabilities have
made topping up payments, but again, if you are unsure, let me know and I'll
check for you.
Carl Nielsen,
3 Aug 2010, 01:10