The South African Revenue Service (SARS) warns that new administrative penalties will take effect from 1 December 2022, urging taxpayers to get their affairs in order.
The new penalties relate to the late submission of a tax return. With effect from 1 December 2022, administrative penalties relating to the late submission of a tax return will be charged when one or more tax return(s) relating to tax years from 2007 up to 2020 are outstanding.
Prior to this change, taxpayers were only liable for administrative penalties for late submission if they had two or more tax returns outstanding for these tax years, SARS said.
An administrative penalty is a penalty levied under Section 210 of the Tax Administration Act (TAA). The Act prescribes the various types of non-compliance which are subject to fixed administrative penalties.
Currently the penalty is imposed only for non-submissions of tax returns in respect of individuals and companies:
- For individuals the penalty will be imposed where the taxpayer has failed to submit a return as and when required under the Income Tax Act for years of assessment commencing on or after 1 March 2006 where that person has two or more outstanding income tax returns for such years of assessment; and
- For companies the penalty will be imposed where the company has failed to submit an income tax return as and when required under the Income Tax Act for years of assessment ending during the 2009 and subsequent calendar years, where SARS has issued that company with 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 issue of the final demand.
Taxpayers who do not submit their tax returns will be charged an admin penalty which must be paid over to SARS.
SARS said that regardless of whether you agree or disagree with the admin penalty, it is advisable to submit the outstanding return to stop further admin penalties.
This is because the penalty will reoccur every month the returns remain outstanding for a maximum of 35 months.
The administrative non-compliance penalty for the failure to submit a return comprises fixed amount penalties based on a taxpayer’s taxable income and can range from R250 up to R16,000 a month for each month that the non-compliance continues.
If taxpayers don’t agree with the penalty being imposed, SARS said that a Request for Remission (RFR) can be submitted.
Through the RFR, a taxpayer must provide reasons for non-compliance for the request to be considered.
If the RFR is disallowed or only a portion was selectively allowed, taxpayers can still object to the decision made by SARS and even appeal the decision if they disagree with the outcome of the objection process.
“When SARS is dealing with the RFR/objection/appeal, partial repayment may be allowed, which means certain transactions may be settled,” it said.
RFRs and other queries around penalties can be done via eFiling or after booking an appointment at a SARS branch.
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