In an effort to promote tax compliance, the South African Revenue Service (SARS) is set to introduce a system of “strict new administrative penalties” against non-compliant taxpayers from 23 November, following the final deadline of 20 November for the 2009 tax season.

The regulations that guide the administrative penalty regime provide for recurring monthly penalties, for up to 35 months, for each month that an income tax return is outstanding.  However, SARS has indicated that it will “first impose the new penalties against repeat offenders; taxpayers who have failed to submit returns for multiple years”.  SARS also has the right to approach a taxpayer’s employer or other party in control of their funds to have outstanding penalties deducted from such a defaulting taxpayer’s salary or other source of funds.

In anticipation of the increase in outstanding submissions, SARS has granted some reprieve for provisional taxpayers.  “SARS will provide additional time for provisional taxpayers who are in good standing with SARS (that is, have no outstanding returns except for the current 2009 return) and who file via e-filing to submit their 2009 returns”.   “Those provisional taxpayers who choose to make use of the additional time, have until 28 February 2010 to submit their returns”, SARS indicated in a recent statement.  This concession is intended to assist provisional taxpayers who usually have more complex tax returns and who generally make use of the services of tax practitioners, who will also benefit from the differentiated submission dates.

Proudly South African encourages all businesses, especially members who are committed to the Campaign’s uplifting ethos as well as individual taxpayers to ensure that they submit their returns regularly and on time.  This is especially critical in the current poor economic climate which exerts additional pressure on government to fund much-needed social and economic initiatives; to support local sectors in distress so that they may sustain and create employment for local people, which is critical to social stability and continued growth.

(Source: South African Revenue Service – www.sars.gov.za)