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Manuel Tables SA Tax Amnesty Extension Bill

by Robert Lee,, London

11 June 2007

South African Finance Minister Trevor Manuel has tabled tax legislation in parliament which would extend the small business tax amnesty until the end of this month.

The Taxation Laws Amendment Bill is the request to the legislature to extend the window period of the Small Business Tax Amnesty by one month to 30 June 2007.

The South African Revenue Service (SARS) received a last minute glut of applications from small businesses in the final month of the amnesty, after carrying out a campaign in conjunction with other government enforcement agencies to persuade companies operating in the informal economy to regularise their tax affairs. By the end of April 2007, SARS had received about 16,000 application forms from business owners, but by 2 June this had risen to well over 275,000.

"From the experience over the last two weeks – during which an additional 2 days were allowed for submissions – and from interviews conducted with applicants, it became clear that many businesses wanted to become tax compliant and make their entities legal," Manuel said.

Under the legislation, SARS would be permitted to allow applicants until 31 August 2007 to submit all documents supporting their amnesty applications.

"It must be emphasized that the extension is granted from a position of strength," Manuel told lawmakers. "The response to the amnesty has been overwhelming and staff at SARS must be complimented for the way in which they administered the amnesty."

The amnesty took effect in August 2006 and was initially scheduled for closure on May 31, 2007. The scheme is available to businesses with a turnover of less than R10 million. 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.

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