SARS Announces Changes To Interest Rates On Outstanding And Overpaid Tax

by Robert Lee, Tax-News.com, London

27 November 2003

The South African Revenue Service (SARS) has announced changes in the rates of interest charged on outstanding taxes, duties and levies, following the decision by the Reserve Bank to lower the repo rate last month.

The rate of interest payable on refunds of any overpayment of provisional tax is equal to the PFMA (the Public Finance Management Act) interest rate minus four percentage points. This rate is currently fixed at 9%.

The rate of interest payable by SARS in respect of refunds made due to successful appeals noted by taxpayers, as well as certain delayed VAT refunds, is equal to the PFMA interest rate. This rate is currently fixed at 13%.

The new rates, applicable from 1 December 2003, are as follows:

• Interest charged by SARS on outstanding taxes, duties and levies is equal to 11,5%;

• Interest on refunds of any overpayment of provisional tax is equal to 7,5%; and

• Interest on refunds in respect of certain successful tax appeals as well as certain delayed VAT refunds, is equal to 11,5%.

Recommended