With the July 11 tax-filing deadline for South African taxpayers fast approaching, the South African Revenue Service (SARS) has warned that rules surrounding the granting of filing extensions have been tightened.
Consequently, the general extension deadline has been abolished, and extensions will now only be granted on an individual basis - and then only for a very good reason. Therefore those taxpayers who miss this Friday's deadline could find themselves liable for penalties from SARS.
However, it emerged at a recent seminar that individuals applying for the foreign exchange control amnesty will be more likely to be granted a tax filing extension this year. This decision has been made because amnesty applicants wanting to apply for the amnesty are required to correctly fill in their tax returns detailing any overseas assets, including any illegally transferred offshore. However, this has led to concerns from prospective applicants that they may leave themselves open to criminal sanctions should their request for amnesty be turned down.
According to Mark Kingon, the assistant general manager of SARS' enforcement division, who addressed the seminar, there is a risk that the processing of an amnesty application might over-run the filing deadline, but he stressed that the amnesty unit would endeavour to complete an amnesty application ahead of an extended filing deadline.
The exchange control amnesty commenced on June 1 this year and runs until November 30 2003, and those who have violated either the Income Tax Act, or exchange control rules, or both, are invited to participate. Also, individuals who have gained income from undeclared assets before they were transferred overseas will be permitted to apply for a domestic tax amnesty.
Finance Minister Trevor Manuel also spoke at the seminar via a pre-recorded speech, in which he urged taxpayers to take advantage of the amnesty, warning that severe penalties await those who choose not to declare illegal monies. However, he reassured taxpayers that the amnesty was not intended to be a witch hunt.
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