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Taxpayers get penalty surprises

Penalties range between R250 and R16 000 – depending on taxable income.

Several taxpayers have complained about receiving penalties for being non-compliant in the submission of tax returns for prior tax years.

The penalties ranging between R500 and R2 000 have been issued mainly for the non-submission of returns, despite taxpayers claiming that they were not required to file tax returns.

The South African Revenue Service (Sars) did not acknowledge these complaints, saying they will require specific cases to be able to investigate.

Sars spokesman Sandile Memela, says it is advisable for taxpayers concerned to contact them with their specific cases. 

He says the rules and applications for administrative penalties have not changed. 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.

This penalty will reoccur for every month the return remains outstanding, Sars indicates on its website.

“Regardless of whether you agree or disagree with the penalty, it is advisable to submit the outstanding return to stop further admin penalties,” the agency says.

Malebo Moloto, technical advisor at the South African Institute of Tax Professionals (Sait), says they have been receiving complaints from their members relating to the penalties since last week.

“It appears that the returns were never required, yet they (the taxpayers) are getting penalty assessments. It seems there is not clear communication or understanding about the reasons for the penalties,” says Moloto.

She has recommended that Sait’s members look at the particular year for which the taxpayer is now receiving penalties for non-submission and to determine whether the taxpayer was actually required to submit a tax return.

TaxTim director Marc Sevitz says they are aware of Sars imposing penalties on “old returns not submitted” in the last few years. In the majority of cases they have encountered, the taxpayers were not required to file a return.

“It is quite concerning because people who thought their income was below a particular tax year’s threshold did not file returns. Many no longer have the necessary information to prove that they did not need to file a return.”

He says the five-year rule, where taxpayers have to keep their documentary proof, only relates to returns that were filed and assessed.

Sevitz says the penalties that they have encountered were mainly for one month – which can range between R250 and R16 000 – depending on the taxable income.

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 and does not exceed R350 000 don’t have to file a return.

However, that 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.

Moloto says if it was not required to file a return, yet the taxpayer has been issued a penalty assessment, taxpayers or their tax advisors should file a request for the remission of the penalties by way of the electronic filing system (eFiling). They can also do it at a Sars branch.

Memela says if the request for remission is disallowed or only a portion was allowed, taxpayers may still object to the decision made by Sars and even appeal the decision if they disagree with the outcome of the objection process.

However, the objections process will only be available once the request for remission has been submitted and considered.

Sevitz recommends that people always submit a tax return, whether it is required or not. “Look at what happens years later to people who thought they were not required to file a return.”

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The government is almost broke (if not now.) They are digging up all old artifacts of circumvention and going after it. I had a call from SARS on my cellphone that I had for 12 years trying to reach the guy who use to have the number. Getting desperate????????? Me thinks YES!!!

The gangsters in charge have looted and wasted everything.
Now the racketeers are sending in their SARS goons to apply more pressure.
Just a typical Protection Racket – organised crime 101

We also had three cases last week, taxpayers earned less than R60 000. As soon as you request the return, there is no IRP 5 / IT 3 information. We have submitted the return based on what the client could remember that he has earned – now there is a debit due to SARS and a verification. The company he worked for already closed down. We had to do an affidavit. I had an appointment with SARS yesterday at the tax practitioners unit, they are not allowed to print the IRP 5 information on their system. Both IRP 5’s shows that SITE was deducted, income was less than R60 000. This now costs the taxpayer money that they can’t afford – they need to take leave for the affidavit and now needs to pay additional fees for tax practitioners to sort this out. No notifications was send to any of these taxpayers to inform them that these returns were outstanding. This was also confirmed on the ITA34 assessement for 2017 – not showing that any returns were outstanding. The only notification received was the notice for penalty and that they need to pay R500 in penalties.

Tax payers should get tax lawyers to sue SARS – or OUTA must do a class action case against SARS for this! SARS is targeting people who can least afford to fight back, the vulnerable. It STINKS!

Agreed, the seem to be targeting the vulnerable, the widows and orphans who have the least resources to put up a fight and don’t know how to deal with these issues. Inevitably by the time they find help it is beyond the period allowed for lodging an objection. Disgraceful behaviour.

I had an instance where a divorcee was trying to eek out a living and was under the threshold for paying tax. SARS wanted supporting documents which were supplied. They disallowed the medical claim which still left no tax payable. So I objected on principle. I was assisting the taxpayer so it cost her nothing to do so.

Grave robbers.

But when we wait for refunds it takes a year + to get it – no interest no penalty on themselves. This is after they’ve tried all pathetic arguments not to refund me.

We advise everyone to submit a tax return every year – despite what SARS say about not needing returns. Just try to sell a house or worse, die, with outstanding returns. Even if you did not need to submit returns according to SARS’ rules, they insist on all outstanding returns being submitted…not that easy to find the information for a dead person. SARS speak with a forked tongue and our experience is that everyone needs to submit every year!

I went under voluntary sequestration in 2012.
Up till then all returns were filed under my original tax number.
I got my new tax number and from 2013 all returns were filed under that one.

In 2015 I received notice of penalties for not filing for 2010/11/12.
Submitted an objection and these were reversed as they found that these were actually submitted. Next month I received the same notice again, objected again, revesed again. This went on for months.

Finally took some time of work to sort this out once and for all. The person who helped me at the branch in Edenvale found that I had 3 active tax numbers. 1 original, 1 someone opened by “mistake” 3 years after my sequestration was done and my current one.

Cases were opened to close the 2 which should be closed. Submitted all required documents, etc. and was assured that this would be the end of it.

No issues during 2016.

This year after I submitted my return I saw that my statement says that I had outstanding returns for 2010, 2011 and 2012.
Went into the branch again, just to find that they can see the request for correction and closure, but serms these were never properly actioned. The person helping me said that thete should be no reason for the 2 “inactive” accounts to still show as active as there are nothing outstanding on them. Another case was opened to stort these accounts out and remove the outstanding returns from my active account.

Now to wait another month for them to sort this out.

Is this poor processes?
Poor systems?
Incompetent personnel?
A combination of all three?

You can sue SARS for harassment – I witnessed how a magistrate told a
tax payer who had been hounded by SARS for no reason, that he was being “harassed” by SARS and if he wanted to, would be able to take them to court and claim costs.

Only being hauled before the Constitutional Court will make SARS halt this & other intimidatory tactics.Long,long overdue.

In my case I have two pension payments that are made that combined are below the threshold. No returns were submitted because it was obvious that none was needed. SARS back dated returns penalty was and is not necessary according to the rules. SARS comes out and says you should know that if you have two sources of income that you have to submit a return. How are you supposed to smell that, know that, or even find out. ???
SARS. Is very bad at education of the tax rules and keeps changing the goal posts and somehow the public must know or wade through thousands of pages of tax legislation to find out and even then it is so complicated that you don’t know as a lay person.
It is time that tax was simplified , straight forward and not onerous. Why is it necessary to study the tax code and go to univesity to study it … rubbish !! Use the kiss system !!

It’s deliberate. SARS likes all the complexity and ambiguity in the tax code so they can always find some technicality to charge interest and penalties over and above additional tax.

Under the present system SARS has nothing to lose by deliberately overcharging, knowing that most taxpayers don’t have the energy, knowledge or resources to fight them. Why are there no penalties for SARS when they are wrong?? At present you can’t even recover your legal costs if you end up in court and are proven right.

There can be no tax morality until the playing field is levelled. And let’s not get started on how this criminal government wastes the taxes collected …….

Why is anyone surprised? It’s the new SARS – the captured one – and let’s face it, like with the delay in VAT refunds, any and all means to make a quick buck to run the country is being tried.
It points to SA having some type of cash flow problem….

Pay up slaves. Hamba Hamba

Go to work, bleed, who cares about you?
pay your taxes and more so that the Politicians can live the life of ROYALTY!

They live in Palaces, drive in Blue light cars speeding to add no value, pay for many wives and girlfriends, friends, fly their families and friends in SAA, stay in expensive hotels, take money to Dubai.

He He He, Pay up Slaves

Do our useless politicians also get penalties and warnings?

Heard this story from a CA who reported into me a few years ago:

He was seconded to the Receivers Office in the old Independent Transkei in the late 80’s. The records and system was an absolute mess with very little or no historical information available. The pressure was on to collect as much as possible and there was no where to even begin.

However, there was a base of complaint taxpayers who were regularly submitting GST and other returns, sooo…..figuring that even compliant taxpayers must have something to hide, they thumbsucked a number and sent out demands to all these known taxpayer demanding immediate payment, stating that they’d been assessed and this amount was now due.

A significant percentage complied despite this being a made up amount and paid these made up penalties, so…..a few months later they repeated the excercise with this group who had paid, and again a percentage complied and paid. A few months later the excercise was repeated again and again until they stopped receiving any payments at all.

Now this could just be a story made up to pass the time, but if accurate, makes 1 wonder if history is not repeating itself ??

Looks like the “Social contract” that exists between the governed and the governors is breaking down quickly. The problem is that once this “social contract” no longer exists, anarchy follows.

I have been saying for years that this was going to bite us in the ass. Worst part is that it’s 100% SARS fault, yet the taxpayer has almost zero recourse. I can guarantee that all the tax returns that were not filed, but the taxpayer was supposed to receive a rebate are being ignored. This is racketeering!

Income tax is against our constitution if ì remember correctly. They might have made it legal to the “countries” benefit but still against constitution.

How does SARS expect to foster compliance when they treat taxpayers in this heavy handed and unfair way. Taxpayer’s must now find the resources to pay a tax consultant to lodge the request for remission, objection, etc.

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