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A Tax Inspector Calls On South Africa's Small Firms

by Robert Lee, Tax-News.com, London

13 March 2007


The South African Revenue Service (SARS) has intensified its campaign to encourage small business owners to apply for amnesty, as a number of SARS officials visited various business premises in Pretoria last week.

The visits are designed to establish whether these businesses are registered for tax, have any outstanding issues with SARS, and are aware of the small business tax amnesty, and whether they had applied to take part.

SARS warned that any businesses found to be operating outside the tax net will be "firmly cautioned" that they are breaking the law.

The team of about 40 SARS officials left amnesty application forms with each business that qualifies for the amnesty.

Business owners will be given a timeframe during which to complete the amnesty form. SARS will record their details, and will conduct follow-up visits to each set of business premises that are found to be non-compliant. SARS said it will consider whether or not to commence with audit activities and possible prosecution in the case of non-compliance.

The action is in line with the commitment Minister of Finance Trevor Manuel made to Parliament and the public in this year’s Budget Speech in respect of the Small Business Tax Amnesty, and SARS will continue to intensify its efforts to ensure that all businesses are afforded the opportunity to apply for amnesty.

"Business owners must understand that the amnesty process is a unique window opportunity for them to regularise their tax affairs," the tax office stated, adding: "The message to businesses in the Hatfield area today was that SARS will increase its enforcement action against tax defaulters if they continue to operate as non-compliant taxpayers in future."

The deadline for filing tax amnesty applications is May 31, 2007. After the deadline, SARS warned that it will "assume a vigorous enforcement campaign" against businesses that are not tax compliant.

The amnesty period took effect in August 2006, and is available to businesses with a turnover of less than R10 million. To date SARS has received 15,000 application forms from business owners.

SARS said it has identified areas where small business activity is concentrated and has grown exponentially in recent times, and it plans similar visits to business areas in other regions of the country over the next few weeks.


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