Global Courant
The South African Revenue Service (SARS) issues administrative fines against taxpayers’ accounts even if they do not meet the criteria for filing a tax return.
According to William Louw of Sable InternationalSARS has imposed fines worth R381 million on nearly 700,000 taxpayers this year alone for late filings.
Louw said those who fail to file and pay their tax returns on time will have to pay interest for late filing or failure to file.
Several emigrated taxpayers also still receive the writ of execution, even though they do not have to file this return.
Louw said taxpayers have the right to apply for a waiver on reasonable grounds within 30 days of the notice, with several options to protest the SARS fine.
For example, taxpayers can submit a request for remission of the fine to SARS.
SARS previously said taxpayers earning less than R500,000 who only earn income from which Pay As You Earn (PAYE) tax can be deducted are exempt from filing returns – leading many people to believe they are not filing returns have to do. punished for not doing so.
Louw advised taxpayers to file a return to demonstrate that they do not owe any tax and then to request remission of the fines.
“A request for remission (RFR) can be filed when a taxpayer disputes an imposed non-compliance penalty. You can do this by navigating to the fine statement through your SARS e-Filing account,” said Louw.
However, SARS forces the taxpayer to restore the default when they have actually defaulted.
He said taxpayers could protest the fine with the following arguments:
I am not required to file a return – I filed the requested return and I had no income to deduct so no return was required. Other – I have submitted the outstanding return as requested, the amount is less than R2000 and it was my first offence. Alternatively any similar type of argument (as allowed above).
Living abroad
Louw noted that South Africans living abroad are not automatically classified as non-tax residents when they leave South Africa, adding that those living abroad may be taxed on foreign earnings that exceed a threshold of R1, exceed 25 million.
He said if the person has emigrated for tax purposes, they should make sure they have received a confirmation letter from SARS confirming this.
For those who have completed tax emigration before January 1, 2022 and have not received a confirmation letter from SARS, they may still be considered tax residents in South Africa or SARS may have canceled the previous application without informing the taxpayer – the letters only started sending from the above date.
He added that those who do not need an SA tax number should try to deactivate it after receiving their non-residency letter to avoid further complications.
The termination of the tax number confirms to SARS that the taxpayer no longer has any taxable assets or streams of income in South Africa, which means they do have to file a tax return.
For those with active tax ID numbers, Louw recommends that they continue to file their annual tax returns for the foreseeable future until SARS’s systems are updated, which could take at least 18 months. This prevents future administrative fines that the taxpayer would have to challenge.
Read: Tax changes for businesses in South Africa – what you need to know
