31 July 2006
Pretoria - The tax amnesty for small business as promulgated by the
President on 25 July this year and contained in the small business tax amnesty
and Amendment of Taxation Laws Act (Act 9 of 2006) takes effect tomorrow, 1
August 2006.
The amnesty will introduce a window of opportunity to a wide spectrum of
small businesses in South Africa to regularise their tax affairs.
The South African Revenue Service (SARS) will administer the amnesty which
will run until 31 May 2007. SARS will have a dedicated Small Business Amnesty
Call Centre in operation to assist taxpayers.
All information on the small business amnesty is available now on the SARS
website.
The Act provides for a small business tax amnesty in respect of the
voluntary disclosure by an applicant of any failure to comply with revenue laws
administered by the Commissioner of SARS.
The purpose and objective of the tax amnesty is to:
* broaden the tax base
* facilitate the normalisation of the tax affairs of small businesses
* increase and improve the tax compliance culture
* facilitate participation in the taxi recapitalisation programme.
Taxpayers who qualify for amnesty
Any individual unlisted company, close corporation, trust, co-operative or
insolvent or deceased estate of an individual which meets certain requirements
may apply for tax amnesty. The requirements are that:
* the individual or entity must have carried on a business
* the turnover (gross income) of the business (or businesses if the individual
or entity carried on more than one business) during the 2006 year of assessment
was not more than R10 million
* in the case of a company or close corporation all the shares or membersâ
interests were held directly by individuals throughout the 2006 year of
assessment
* in the case of a trust all the beneficiaries of that trust throughout the
2006 year of assessment must have been natural persons.
For purposes of the amnesty the â2006 year of assessmentâ is defined as the
year of assessment which ended during the period of 12 months from 1 April 2005
to 31 March 2006. Small businesses which are unregistered for tax purposes at
the end of the 2006 year of assessment or which are registered taxpayers but
whose income from, supplies made or employment taxes due in respect of small
business activities have not been declared or have been understated during any
year of assessment preceding the 2006 year of assessment will benefit from the
amnesty.
Method of application
An applicant must apply for amnesty to SARS on a form which can be obtained
at any SARS branch office in any of the 11 official languages in South Africa.
Application forms must be submitted at any time during the period 1 August 2006
to 31 May 2007.
The applicant must together with the application for tax amnesty
furnish:
* an income tax return for the 2006 year of assessment
* a statement of all assets (at cost) and liabilities of that applicant as at
the end of the 2006 year of assessment.
If it is not possible for the applicant to provide full particulars of any
actual amounts in the application or in any return or statement relating to the
application, the applicant may provide a reasonable estimate of those amounts.
If an estimate is used this must be clearly indicated.
Amnesty levy
An amnesty levy is payable for amnesty. The amnesty levy is based on a
sliding scale rate and is applied to the taxable income of the applicant for
the 2006 year of assessment to the extent that the taxable income is
attributable to any amount derived by the applicant from the carrying on of
business.
From R - to: R35 000: no levy payable
From R35 000 to: R100 000: two percent of the amount above R35 000
From R100 000 to: R250 000: R1 300 + three percent of the amount above R100
000
From R250 000 to: R500 000: R5 800 + four percent of the amount above R250
000
From R500 000 to: and above: R15 800 + five percent of the amount above R500
000
All public enquiries about the amnesty can be referred to:
The SARS Small Business Amnesty Unit:
Call Centre number: 0860 12 12 20
Fax: 011 602 5502
E-mail: sbau@sars.gov.za
Postal address: P O Box 292
Groenkloof
0027
For further details contact:
Adrian Lackay
SARS Communications
Tel: (012) 422 4206
Cell: 083 388 2580
Issued by: South African Revenue Service
31 July 2006
