South Africa's Revenue Service Tightens Up On Tax Return Deadlines

by Amanda Banks, Tax-news.com, London

02 May 2001

Individual and company taxpayers in South Africa who are seeking to extend the deadline of their income tax returns will be bitterly disappointed to find that the South African Revenue Service (SARS) has decided to tighten up its policy on granting extensions to bring about a more productive tax collection and, as national revenue manager of SARS, Frank Starke, says, it will enable the department to 'effectively plan its workflow.'

In the past SARS has been fairly tolerant of taxpayers' requests to extend their tax returns but now any extensions granted will be of a much shorter time limit than before. Starke says taxpayers who have failed to submit previous years' tax returns or have been tardy in paying their taxes will likely be refused any extensions this year. He also confirmed that penalties will be imposed on late tax returns of any sum 'up to 35% of tax payable for individuals and companies.'

The tax law states that companies must present their income tax returns within 60 days of the date on which the company's financial year ends and individual taxpayers also have 60 days to return their tax forms within 60 days of receipt.

But previously SARS has granted companies an automatic two-month extension after the financial year end and if their financial statements were still incomplete when this period expired, many companies were given an additional extension of a further 10 months.

In response, head of marketing and communications of the South African Chamber of Business (Sacob), Marius Louwe, said that while Sacob welcomes SARS' initiatives, companies may be in danger of being damaged by the new strict deadlines and said the process should have been implemented in phases.

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