OVERDUE TAX RETURNS COULD SEE YOU PROSECUTED

SARS launches massive drive to clamp down on non-compliant taxpayers  

''The only thing that hurts more than paying an income tax is not having to pay an income tax.'' - Thomas R. Dewar

While this quote may be open for debate, the fact that SARS is clamping down on outstanding tax returns and debt is not. This article by SARS released in previous years reminds ''all taxpayers that in accordance with the Tax Administration Act No. 28 of 2011 (TAA) and specifically Section 234 (d), it is a criminal offense not to submit a tax return for any of the tax types they are registered.''

The tax types include:

• Personal Income Tax (PIT)
• Corporate Income Tax (CIT)
• Pay As You Earn (PAYE)
• Value Added Tax (VAT)

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SOME TRENDS SARS IS FOCUSSING ON

Outstanding or late returns

• Outstanding returns and late returns remain a concern and SARS says it will step up its enforcement of penalties in this regard.‍

Rental & Capital Gains Tax

• "Many taxpayers still do not declare rental income from properties and we will improve our data matching in this regard by collaborating with the Deeds Office. This matching will also allow us to better enforce non-compliance in the declaration of Capital Gains Tax," says SARS.

Commission

• SARS will renew its focus on monitoring income and expenses from commission earners.

Trusts

• SARS is concerned about the accuracy of declarations of distributions to and from trusts to the beneficial recipients.

Have a look at this Fin24 article for more trends.

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NOT COMPLIANT? HERE'S WHAT COULD HAPPEN 

Prosecution  

It is a criminal offense for a person to willfully and without just cause to fail or neglects to withhold and pay to SARS an amount of tax as and when required under a Tax Act as per section 234(2)(k) of the Tax Administration Act (TAA).

SARS is currently working with both the SA Police Service (SAPS) as well as the National Prosecuting Authority (NPA) to criminally prosecute fraudsters.

SARS has already successfully convicted many taxpayers for non-compliance. It has even successfully convicted some of its staff for colluding with taxpayers.

Fines

An Administrative Penalty (Admin Penalty) is a penalty levied under Section 210 of the Tax Administration Act (TAA). The Act prescribes 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.
• 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. Administrative penalties recur each month that the taxpayer is non-compliant, up to a maximum of 35 months.

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HUYSAMEN WESTRAAD INC.

Based in the Vineyards Office Estate in Bellville, our team of chartered accountants and registered auditors are led by partners Gilbert Westraad and Tiaan Hoon, providing expert tax & accounting advice and practical solutions to our clients in the Cape Peninsula and surrounding areas since 1987.

We offer various tax services for companies, trusts and individuals, ensuring compliance with all the applicable tax laws, and providing peace of mind in the knowledge that your business is compliant.