Manuel May Extend South African Tax Amnesty
South African Minister of Finance, Trevor Manuel, has decided to recommend
an extension of the deadline for companies filing under the small business tax
amnesty after meeting with leaders of five accounting and business organisations. The Minister, who was accompanied by Commissioner of the South African Revenue
Service, Pravin Gordhan, on Monday met with the South African Institute of Professional
Accountants (SAIPA), South African Institute of Chartered Accountants (SAICA),
South African Chamber of Business (SACOB), National Professional Teachers’
Organisation of South Africa (NAPTOSA), and the South African National Taxi
Council (SANTACO) to hear their arguments for the amnesty to be extended. The meeting was told that many potential applicants were unable to apply for
the amnesty because more time was required to prepare financial statements and
supporting documents. The organisations have made commitments that include utilising
their own internal structures and channels to increase amnesty advocacy and
education should the deadline be extended. The Minister indicated that he would recommend a short extension and make an
announcement in parliament on 7 June 2007 when he introduces the Taxation Laws
Amendment Bill in the National Assembly. The amnesty period took effect in August 2006 and closed on May 31, 2007. The
scheme was available to businesses with a turnover of less than R10 million,
and was designed to encourage small companies operating outside the tax system
to tell SARS about undeclared income and to regularise their tax affairs. In
return for not being punished by the tax and legal authorities, amnesty filers
had to pay a 5% tax on their newly-declared income. In the lead-up to the end of the amnesty, the government undertook a last minute
campaign to encourage businesses to use the amnesty which saw several thousand
SARS officials joined by members of the South African Police Service (SAPS)
and officials from the Department of Home Affairs in 30 towns and cities. In
all 4,160 small businesses were visited, resulting in over 1,000 new applications
for amnesty. By the end of April, SARS had received more than 16,000 application
forms from business owners. SARS has warned that it will "assume a vigorous enforcement campaign"
against businesses that are not tax compliant after the amnesty period has expired. .
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