Can SARS’ interest charge per section 89quat be waived?
06 May 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Is interest
under section 89 a statutory charge which cannot be waived?
As far as I understand 89quat(2) interest is reversible
under Section 89quat(3) if the Commissioner is satisfied that the interest
payable in terms of Section 89quat(2) is a result of circumstances beyond the
control of the taxpayer. There is however no specific Section under Section 89
reversing Section 89 interest.
A: The deletion
of both section 89(2) and section 89quat from the Income Tax Act is not
effective yet and they are still effective in their present form. You are correct that section 89 does not
allow for SARS to reverse interest levied under section 89.
SARS makes the following comment in Interpretation note 68:
"Remittal of interest: A taxpayer may request a senior SARS
official to direct that so much of the interest as is attributable to
prescribed circumstances beyond the taxpayer’s control, is not payable by the
taxpayer. These circumstances are limited to a natural or human-made disaster,
a civil disturbance or disruption in services; or a serious illness or accident
[see section 187(6) read with 187(7)]. As section 187(6) refers to interest
imposed under section 187(1), the remittal only applies to interest payable on
a tax debt in respect of understatement penalties or a jeopardy assessment as
set out above.
Section 187(1) also regulates the accrual of interest on
refunds payable by SARS. However, because section 188(3) did not come into
operation such interest will only accrue once section 188(3) comes into
We submit that section 187(6) of the Tax Administration Act
applies. It reads as follows: If a
senior SARS official is satisfied that interest payable by a taxpayer under
subsection (1) is payable as a result of circumstances beyond the taxpayer’s
control, the official may, unless prohibited by a tax Act, direct that so much
of the interest as is attributable to the circumstances is not payable by the taxpayer.
A request can therefore be made in terms of section 187(6)
(of the Tax Administration Act) to reverse the interest levied under section 89
(of the Income Tax Act or a Tax Act).
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