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SARS Undertakes Last Minute Amnesty Blitz

by Robert Lee, Tax-News.com, London

27 April 2007


The South African Revenue Service (SARS) on Wednesday added more than 1,000 new applications to the Small Business Tax Amnesty process, through an extensive registration campaign across the country.

Several thousand SARS officials were joined by members of the South African Police Service (SAPS) and officials from the Department of Home Affairs in 30 towns and cities, where 4,160 small businesses were visited. Some 1,106 new applications for amnesty were received, while 2,218 application forms were handed out to businesses.

The registration programme will continue until 31 May 2007 – the deadline for the Small Business Tax Amnesty period.

The amnesty period took effect in August 2006, and is available to businesses with a turnover of less than R10 million. The scheme allows small firms to escape punishment for declaring hidden income in return for paying a 5% tax on the money. To date, SARS has received more than 16,000 application forms from business owners.

While the amnesty programme has the primary focus of broadening the tax base by including businesses that have never registered for tax or businesses that owe SARS outstanding tax, the tax authority said that it will continue its enforcement activities in instances of non-compliance with the law.

Arising from work already done on the amnesty, 39 small business owners appeared in the Durban magistrate’s court for failing to submit tax returns. At the same time customs officials confiscated 950 master cases of illicit cigarettes en route to Johannesburg.

Regulations prescribing the circumstances under which SARS may waive additional tax, interest and penalties for qualifying small businesses were published in the Government Gazette on Friday, April 20, 2007. These regulations took effect on publication. They allow for small businesses to apply to SARS to have additional tax, interest and penalties waived.

Such businesses may already be registered taxpayers, and this category was initially excluded from the amnesty legislation.

SARS claimed that its engagement with businesses on various levels and forums "will contribute to a successful amnesty process".


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