The South African Revenue Service (SARS) has reassured taxpayers that the deduction
of unpaid administrative penalties from salaries and bank accounts from September
this year, announced when launching the 2010 tax season earlier this month,
will be a last resort that affects only a minority of non-compliant taxpayers.
It confirmed that compliant taxpayers who submit their tax returns on time
and pay what is due to SARS will not be affected. The people who are affected
by administrative penalties are those who for a number of years have failed
to submit returns.
The administrative penalty system became law on January 1, 2009, after extended
public consultation in 2008. In October last year, SARS warned taxpayers with
multiple outstanding returns that they would be affected by the first phase
of the system’s implementation. These taxpayers were given a final opportunity
to correct their non-compliance before penalties were imposed.
In January this year, SARS issued the first round of penalties to approximately
230,000 taxpayers who had returns outstanding for multiple years. However, approximately
180,000 taxpayers have failed to respond to the penalty notices.
Non-compliant taxpayers were warned again at the launch of the tax season,
that in the event of penalties not being settled, their employers would be appointed
as agents to deduct and pay over the outstanding administrative penalties due
to SARS.
SARS will be communicating with the affected employers, informing them of the
legal framework and process to deduct the outstanding penalty from the taxpayer’s
salary, depending on the circumstances of the taxpayer and based on the most
recent information SARS has available.
At the same time, SARS has, before appointing an employer to deduct the outstanding
penalty, built into the process an opportunity to apply for remission of penalty
and an opportunity to lodge an objection. If a taxpayer has requested the remission
of an administrative penalty, collection steps will generally not be taken until
SARS has dealt with the request.
However, if the response from non-compliant taxpayers still remains unacceptable,
SARS will be forced go to the next step in the process and extend the appointment
of agents to banks holding funds on behalf of these taxpayers.
LAWANDTAX-NEWS.COM
