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SARS Eases Rules For Tax Advisors

by Robert Lee, Tax-News.com, London

13 September 2006


Financial services and tax advisers will reportedly be exempted from South Africa's Financial Intelligence Centre Act (Fica) when advising small business taking part in the nation's tax amnesty.

According to Business Day, Pravin Gordhan, South African Revenue Service (SARS) commissioner, says that advisors will be exempted from certain provisions of Fics next week. This will allow them to assist clients partaking in the amnesty. without having to report them under the act.

The amnesty, which commenced on August 1, is designed to entice the substantial number of small businesses currently operating in the 'informal economy' to regularise their tax affairs while encouraging a compliance culture and broadening the tax base.

An incremental levy is imposed on income declared under the scheme, up to a maximum level of 5%, based on declarations of income for the 2005/6 tax year. Initially, the government had proposed a flat 10% rate of tax, but the rules were relaxed to encourage more firms to participate.

Companies with an annual turnover of less than R10 million can take part in the scheme, which closes May 31, 2007.

So far, it would appear that take-up of the amnesty offer by small firms has been slow. As of September 11, SARS had received 3,454 inquiries, issued 2,635 application forms on request and received 366 applications for amnesty, according to Business Day.


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