A fresh space of tax regulation amendments, signed by President Cyril Ramaphosa, and promulgated on January 20 2021 has granted SARS the complete appropriate fireplace vitality it wants to impose felony sanctions on taxpayers who neglect their tax affairs.
Sooner than the promulgation of the Tax Administration Regulations Modification Act, 2020 (Modification Act) a mistake made by a taxpayer used to be only a crime when it used to be done “wilfully and without honest reason.” In other words, the regulation required a component of intent; the save negligence or lack of information introduced on your administrative non-compliance, you might per chance well maybe like gotten off with a slap on the wrist.
Henceforth, your intention would now not matter – the save you “negligently” fail to conform or be obvious mistakes on your taxes you commit an imprisonable felony offence. Lack of information, a defence commonly conventional by taxpayers, will no longer waft – SARS will from now on withhold you to a increased identical earlier of care.
Strategically talking, it is miles a courageous, fair appropriate transfer from the SARS-Treasury team, as the straightforward inclusion of the note “negligence”, now permits for the offence criteria to be broadened to such a diploma that even the slightest mistake made in one’s compliance might per chance well maybe additionally lead to felony prosecution.
The 11 Mistakes
Because the asserting goes “we all attach mistakes,” but when it comes to mistakes on your taxes every of the 11 mistakes listed in the Modification Act might per chance well maybe stop up in up to 2 years in prison. So, it will per chance per chance well maybe be distinguished that you educate yourself on precisely what they are to remain unmistakably compliant and factual.
What are they?
- Failure to register your distinguished parts with SARS or to convey them of any adjustments to your distinguished parts;
- Failure to nominate a consultant taxpayer or to convey SARS of such appointment or a exchange in consultant taxpayer;
- You receive compensation for helping someone with their taxes and also you fail to register with SARS as a tax practitioner;
- Failure to submit a return when required to full so;
- Failure to retain all connected substantiating records;
- Failure to procure any information as and when requested by SARS to full so;
- Failure to look and comply once you is more seemingly to be requested by SARS to support a gathering or a listening to in repeat to give proof;
- You are issued with a directive or instruction by SARS and also you fail to conform with it;
- You fail to portray any area fabric information to SARS or you fail to procure SARS with any notification as required below any tax Act;
- You are notified by SARS to pay an quantity on one other taxpayer’s behalf in settlement of a tax debt and also you fail to full so; or
- You might per chance well like a withholding obligation and also you fail to withhold or deduct the tax precisely and pay it over to SARS.
The only methodology to keep some distance off from a mistake is to now not attach it
The Modification Act honest demonstrates that the fresh SARS Commissioner and the SARS-Treasury team like adopted a total no-nonsense reach to non-compliance.
Given how without ache (and the contrivance in which in total) these mistakes can happen, and the contrivance in which exhausting they’ll be to honest, taxpayers can like to insist indecent accuracy and vigilance when submitting their taxes.
It might per chance per chance well maybe serve you successfully to nominate a qualified tax consultant or experienced tax licensed professional to connect obvious you stop now not stop up on the wrong aspect of those fresh principles.
Authored by: Roxanna Naidoo, Admitted Lawyer and Lisa Mihalik, tax and appropriate administrator at Tax Consulting SA