Fixed amount penalties for non-compliance under tax admin laws Act
28 January 2014
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Posted by: Author: Michael Stein
Author: Michael Stein The
Tax Administration Laws Act 28 of 2011 is a fascinating and far-reaching piece
of tax legislation that affects all taxpayers and tax practitioners. For
instance, Chapter 15 of the Act deals with administrative non-compliance
penalties, which comprise fixed amount penalties and the percentage based
penalty. The part dealing with the fixed amount penalties provides that if the
South African Revenue Service is satisfied that there has been non-compliance
by a person, it must impose the appropriate penalty in accordance with the
table in the Act. The table provides for a penalty the amount of which depends
upon the taxable income of the offender in the preceding year and escalates on
a monthly basis. Now non-compliance is failure to comply with an obligation that is
imposed by or under a tax Act and is listed in a public notice issued by the
Commissioner, other than matters that are punishable by other penalties. The only public notice issued by the Commissioner under this provision
to date was issued on 1 October 2012 as GN 790 in Government Gazette 35733. It lists only one instance of
non-compliance, that is, failure by a natural person to submit an income tax
return as and when required under the Income Tax Act for years of assessment
commencing on or after 1 March 2006 when that person has two or more
outstanding returns for those years of assessment. This means that only
individuals may be liable for the fixed amount penalty and then only for the
failure to submit the annual income tax return when required. So, as the law
now stands this penalty does not apply to other taxpayers, such as companies
and trusts.
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