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Tax defaulters must apply by October 31

19 October 2011   (0 Comments)
Posted by: SAIT Technical
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Tax defaulters must apply by October 31

David Morgan - REUTERS

Taxpayers who have tax defaults with the South African Revenue Service (SARS) and would like to be granted relief from penalties and interest, and avoid possible criminal prosecution have until October 31 to voluntarily disclose their outstanding tax affairs.

"This is when the period for applications for relief under the Voluntary Disclosure Programme (VDP) will close," SARS said on Monday. Tax defaults ranged from submitting inaccurate or incomplete information, or failure to submit information to SARS for any tax type that SARS administers.

"The aim of the VDP is to encourage applicants to disclose their tax defaults and to give them the opportunity to regularise their tax affairs. Over recent weeks SARS has been conducting an extensive advertising campaign to raise public awareness about the VDP.

" SARS emphasised that the current VDP programme was a unique opportunity for defaulting taxpayers and SARS encouraged such taxpayers to use the remaining window period available to them.

"The VDP allows for individuals and entities (such as close corporations, trusts, companies and co-operatives) to make full and voluntary disclosure of any tax default that occurred prior to 17 February 2010."

By 14 October 2011, SARS had received 5,755 VDP applications, an increase of 686 from the end of September.

The breakdown of VDP applications per tax type was as follows:

- Corporate Income Tax - 67%

- VAT - 20%

- Personal Income Tax - 10%

- Other taxes - 3%

A defaulting taxpayer would be granted relief under the programme if the application met the following requirements:

- The disclosure was complete in all material respects and made in the prescribed form and manner

- SARS was not aware of the default which must have occurred prior to 17 February 2010

- A penalty or additional tax would have been imposed had SARS discovered the default in the normal course of business

- It would not result in a refund due by the Commissioner.

All types of tax administered by SARS qualified under the VDP. However, administrative penalties were excluded.

Prospective applicants could request application forms when visiting any SARS Branch or submit an application via eFiling. Manual applications, with the supporting documents, may be submitted directly to the VDP Unit by hand. If an application meets the criteria set out in the legislation, then SARS will enter into an agreement with the taxpayer regarding the relief to be granted.

The agreement would cover amongst others:

- The material facts of the defaults disclosed

- The relief granted by SARS under the Tax VDP

- Payment terms in respect tax payable

- The fact that the relief may be withdrawn if SARS subsequently determined that the disclosure did not constitute a valid disclosure under the Tax VDP.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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