SARS allows two more days for amnesty

THE South African Revenue Service (SARS) had by yesterday received more than 90000 small business tax amnesty applications. SARS spokesman Adrian Lackay said the Receiver expected the national tax register to increase 27%.

“This is very encouraging for SARS,” Lackay said. “The small business amnesty has met our expectations.” Because of the flood of applications still being received, SARS had decided to extend the deadline to Saturday, Lackay said.

Some tax analysts are not entirely convinced by SARS’ efforts. Edward Nathan Sonnenbergs tax director Beric Croome said it was disappointing that the tax register would be increased only 27%.

Although tax collection had soared in recent years, the tax gap — the total amount of uncollected tax — ran into billions of rands. About 4,1-million working South Africans did not pay tax.

Des Kruger, a tax director at Mallinicks Attorneys, said that it was “unfortunate that SARS did not do more in its efforts” to increase the register.

Perhaps SARS should have extended the amnesty still further, Kruger said. “ There are many businesses not paying taxes.”

SARS had identified 50000 taxi operators last weekend who might be eligible for the amnesty. It had notified operators by way of SMS, said Lackay. This was done in conjunction with the transport department.

SARS expected to receive about 100000 applications today. Lackay said SARS was receiving 4000 to 5000 applications daily.

The amnesty started in August and expires today.

It allows for the scrapping of outstanding taxes with no prosecution against businesses with annual turnover s less than R10m.

SARS offices across the country had been inundated with enquiries from businesses which wanted to meet the deadline and so SARS offices across the country would accept applications tomorrow and Saturday. Forms submitted on these days would be deemed to have been received by today, said Lackay.

Croome said it was unfortunate that further amendments to the Small Business Tax Amnesty and Amendment of Taxation Laws Act were publicised only at the beginning of this month.

Those amendments seek to clarify the position regarding companies owned by trusts.

The proposed amendments, which still have to be passed by Parliament, clarif y that SARS will have reference to the recipients of awards made by the trust in the past two years.

Recently, it became apparent that SARS recognises that certain charities are conducting trading activities and that such organisations are in need of amnesty because the organisation may not have complied with income tax or value- added tax obligations.

“It would have been far preferable if the correct legal framework for the amnesty was in place at the time that it commenced,” said Croome.
source:www.businessday.co.za