Several taxpayers who have received penalties for the non-submission of tax returns for prior years have had the penalties reversed.
Tax practitioners have earlier been inundated with complaints from taxpayers who received penalties for non-compliance from the South African Revenue Service (Sars).
However, many were not required to file returns as they were below the income threshold for that particular tax year. The penalties issued by Sars ranged between R500 and R2 000.
Taxpayers who do not submit returns are charged with a penalty which can range from R250 to R16 000 per month, depending on the taxable income of the taxpayer.
A spokesperson for the Office of the Tax Ombud says they have received telephonic enquiries about the penalties. “They were asked to lodge formal complaints to allow our office to investigate, but no one came forward.”
The South African Institute of Tax Professionals (Sait) says they are no longer receiving complaints from their members in terms of the penalty assessments.
Malebo Moloto, technical advisor at Sait, says they have met with Sars. Following the meeting Sait advised taxpayers to check the public notices (on its website) which indicate what the thresholds and requirements for the submission of a return are.
If a return was due, taxpayers will need to submit a return otherwise the penalties will reoccur for every month the return remains outstanding.
If a return was not due, taxpayers could challenge the penalties they received by using the request for remission functionality, Moloto explained.
They can do it through the electronic filing system (eFiling) or they can also do it at a Sars branch.
“After we informed our members of the Sars process – that they could challenge the penalties by submitting a request for remission, we have not received any further correspondence. It would appear that the issue has been resolved,” says Moloto.
A small accounting and tax practice in Pretoria says they have also received several cases where people received penalties, but have been successful in reversing the penalties.
However, in some instances Sars has not yet responded to the requests for remissions. According to the firm it used to take at least five business days for Sars to make a decision on whether to remit the penalty or not, but it now takes at least 15 days.
“We still do not have certainty on a number of cases that we have submitted for remission,” a spokesperson for the firm said.
It also seems that taxpayers are quite uninformed about when to file returns and when not. In one instance an 87-year-old taxpayer was told he no longer needs to file provisional tax returns.
However, he misunderstood and stopped filing annual tax returns. He received penalties worth R22 000.
Sars has a questionnaire on its website, which asks several questions to determine whether a taxpayer is required to file a return or not.
These questions include whether the person is conducting a trade, received an allowance such as a travel, subsistence or office bearer allowance, whether the person held any funds or assets outside South Africa above a certain value, or whether the person had a capital gain or loss exceeding a specific amount.
For this year taxpayers, whose gross income in the form of salary or wages comes from one single source does not exceed R350 000, do not have to file a return.
However, the threshold has been adjusted quite often. In the 2009 tax year anyone earning a salary or wages of less than R60 000 a year did not have to submit a return.
Read more from Amanda Visser: