With only six weeks left till the closing date for tax return submissions, the South African Revenue Services (SARS) are increasingly urging those with outstanding tax returns to comply. Despite the tax collecting authority having reportedly received over four million tax returns as of late, there are still a percentage of people who continuously fail to submit. To deal with these individuals, SARS have tabled fixed costs for late submission/admin penalties.
Penalties are not a new concept for SARS. A few years ago SARS implemented a system used to identify and issue penalties where individuals failed to submit their returns. In some cases, people were found to have had more than one return outstanding. It was on this merit that SARS began issuing penalty fees for each return that was submitted past the deadline. However, the amounts weren’t fixed, until now.
Below is a further breakdown of the fixed penalty fee amounts:
*The above table was sourced from TaxTips
“Currently the penalty is only collected for the late or non-submissions of returns. Any taxpayer who doesn’t submit their return will be charged this penalty and has to pay the penalty to SARS,” states SARS.
The penalty fee is comprised of fixed amount penalties as well as percentage based penalties.
“The penalty amount that will be charged depends 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,” adds SARS.
The fee will be added on a monthly basis until all outstanding tax returns have been submitted and all outstanding monies have been paid.
“In addition, penalties that have already been added to your account for not submitting tax returns timeously will not be waived,” explains Danita de Wet a tax practitioner from Tax Tips.
“The minimum penalty for an individual is currently R250 per return per month. This means that where four tax returns are outstanding, a minimum penalty of R1000 per month will be issued. As the amount of the penalty varies with reference to the individual’s income for the tax year of assessment. The maximum penalty is R16 000 per month however, to qualify for this penalty, your income has to be in excess of R50 million in a certain tax year of assessment. This SARS penalty is still applicable for each month a return is outstanding,” states FMJ Financial Services (FMJ).
You can dispute the penalty
Like most things, an option to dispute exists, as everyone is not always in agreement, and in many cases extenuating circumstance too have a role to play.
Should you want to dispute your penalty fees, SARS have suggested the submission of a Request for Remission (RFR) form.
“This can be submitted when a taxpayer disputes any administrative penalties levied due to non-compliance. If the Request for Remission is disallowed or only a portion was allowed, you may still object to the decision made by SARS and even appeal the decision if you disagree with the outcome of the objection process,” says SARS.
The objection processes can however not be utilised before the RFR is submitted and considered.
RFR forms are obtainable from any SARS branch or via eFiling.
“Administrative penalties recur each month that the taxpayer is non-compliant, up to a maximum of 35 months. Each recurring penalty will have a unique transaction number. When SARS is dealing with the objection/appeal, partial repayment may be allowed which means certain transactions may be settled,” SARS highlights.
If a taxpayer does not respond to any notices or demands in respect of the outstanding penalty, SARS is allowed in terms of Section 99 of the Income Tax Act to recover money from your employer that will be directly deducted from your salary, adds de Wet.
It is always beneficial to have a trusted tax practitioner of your choice in your corner guiding and advising you through the process.
“Make sure that you deal with a properly qualified tax practitioner, which has a website and has been around for a while.
“A tax practitioner can also express an opinion on whether the penalty is excessive or incorrectly issued by SARS against the taxpayer. If this is the case, all returns need to be brought up to date and an objection lodged against those penalties. Unfortunately, SARS will not remove the penalty against a taxpayer where a return should have been submitted and which was not submitted on time. No exceptions and this is confirmed by myself with extensive experience with this issue,” adds FMJ.
With tax return season nearing a close on 25 November, SARS has warned against scam artists who may be exploiting the desperation of people to submit their returns in time. Should you want to verify any information or that of a SARS employee, contact a SARS branch to check the information is legitimate.
Handy tip: If you still have an outstanding tax return to file, why not do it through TaxTim.