24 January 2007
Pretoria: The Minister of Finance today published draft regulations for
public comment that prescribe the circumstances under which the South African
Revenue Service (SARS) may waive additional taxes, penalties and interest for
qualifying small businesses.
These measures are part of the SARS Small Business Tax Amnesty process. They
are applicable to small businesses that have already provided returns to SARS
or have been assessed by SARS for taxes, since full amnesty is not available
for these taxes. Additional tax, penalties and interest may have been levied on
these taxes, thereby increasing the outstanding amount of the small businesses'
tax debt.
Since an objective of the amnesty process is to facilitate the normalisation
of the tax affairs of small businesses, a partial waiver of outstanding tax
debts has been proposed as part of the amnesty process. It must be emphasised
that the waiver applies only to additional tax, penalties and interest and
excludes the underlying tax portion of the tax debt owed to SARS (e.g.
outstanding Income Tax or VAT).
Application
An applicant applying for the waiver must submit an application before 31
May 2007. The application must contain the following:
* a statement of all assets (at cost) and liabilities as at 31 March
2006
* all outstanding returns of the applicant as on 31 December 2006.
The application will not be considered by SARS in the following
instances:
* where the Sheriff of the High Court has attached assets of the applicant
in execution of a writ of execution obtained on behalf of SARS
* formal sequestration or liquidation proceedings have commenced against the
applicant
* a notice has been issued by SARS to the applicant to indicate that an audit
or investigation is to be conducted by SARS on the affairs of the
applicant.
Waiver
The amount of the additional tax, penalty and interest that will be waived
is the amount that relates to the qualifying period covered by the amnesty
legislation and is still outstanding as at the close of business on 31 July
2006, the day before the amnesty window period opened. The maximum amount of
additional tax, penalties and interest that may be waived by SARS is R1
million, which covers the situation of the vast majority of small businesses.
In return the applicant must settle any outstanding balance within six months
or such longer period as SARS may allow, failing which the additional tax,
penalty and interest waived will be reinstated.
Comment
The draft regulations are available in the Government Gazette and open for
public comment from today until 9 February 2007. Public comments can be
submitted to:
Ms Adele Collins
Fax no: (012) 422 4035
E-mail: acollins@sars.gov.za
Postal Address:
SARS Legal and Policy Division
Private Bag X923
Pretoria
0001
Issued by: South African Revenue Service
24 January 2007
