http://business.iafrica.com/features/844716.html
In his mid-term Budget speech last October, the Minister of Finance said he expected revenue for the 2012/2013 tax year to be approximately R5-billion lower than 2011/2012. But will this turn out to be the case when the final figures are announced on 27 February?
The Minister’s calculations were based on income and expenditure figures pre-dating SARS’ implementation of the penalties allowed for in the Tax Administration Act, which became effective on 1 October last year.
In the ensuing months tax practitioners reported that their clients have been hit hard with penalties and interest, even for genuine errors, which could go some way towards increasing tax revenue, says Mike Dingley, National Head of Taxation Services of global audit, tax and advisory firm Mazars.
The potential for penalties will also cause taxpayers to take greater care in their taxation compliance thereby also increasing tax revenue.
The TAA provides for two types of penalties, namely administrative compliance penalties, such as the 10 percent penalty for a late VAT return and the wide-ranging understatement penalties.
"Understatement penalties can be triggered in respect of any tax period where SARS has been prejudiced through a taxpayer not submitting a return, omitting something material from a return, making an incorrect statement on a return or failing to pay the correct amount where no return is required," says Dingley.
For example, if input VAT is claimed in an earlier period than provided for in the VAT Act, the "understatement" that arises can be subject to a penalty, even though there is "overstatement" in the following period.
"The penalty regime is harsh and quite often the punishment does not seem to fit the crime," says Dingley.
However, it may be difficult to determine just how much penalties have boosted the Receiver’s revenue as income from this source is not normally itemised in the national accounts. "In the interests of transparency, we hope this will be addressed."
Dingley says Mazars was encouraged by the Minister’s mid-term remarks about ensuring value for money in public spending, initiating procurement reform, eliminating waste and rooting out corruption.
"It’s important to spend as much effort on the expenditure side of the income statement as it is on the income side, and we hope to learn more about how these measures will be implemented when the Minister delivers his Budget speech later this month."
just want to point out with this as well - if SARS find an error on your return they will penalise you for that error. you need to ensure that your return is as accurate as possible. if there is an amendment on the return, SARS will penalise you for this as well.
In his mid-term Budget speech last October, the Minister of Finance said he expected revenue for the 2012/2013 tax year to be approximately R5-billion lower than 2011/2012. But will this turn out to be the case when the final figures are announced on 27 February?
The Minister’s calculations were based on income and expenditure figures pre-dating SARS’ implementation of the penalties allowed for in the Tax Administration Act, which became effective on 1 October last year.
In the ensuing months tax practitioners reported that their clients have been hit hard with penalties and interest, even for genuine errors, which could go some way towards increasing tax revenue, says Mike Dingley, National Head of Taxation Services of global audit, tax and advisory firm Mazars.
The potential for penalties will also cause taxpayers to take greater care in their taxation compliance thereby also increasing tax revenue.
The TAA provides for two types of penalties, namely administrative compliance penalties, such as the 10 percent penalty for a late VAT return and the wide-ranging understatement penalties.
"Understatement penalties can be triggered in respect of any tax period where SARS has been prejudiced through a taxpayer not submitting a return, omitting something material from a return, making an incorrect statement on a return or failing to pay the correct amount where no return is required," says Dingley.
For example, if input VAT is claimed in an earlier period than provided for in the VAT Act, the "understatement" that arises can be subject to a penalty, even though there is "overstatement" in the following period.
"The penalty regime is harsh and quite often the punishment does not seem to fit the crime," says Dingley.
However, it may be difficult to determine just how much penalties have boosted the Receiver’s revenue as income from this source is not normally itemised in the national accounts. "In the interests of transparency, we hope this will be addressed."
Dingley says Mazars was encouraged by the Minister’s mid-term remarks about ensuring value for money in public spending, initiating procurement reform, eliminating waste and rooting out corruption.
"It’s important to spend as much effort on the expenditure side of the income statement as it is on the income side, and we hope to learn more about how these measures will be implemented when the Minister delivers his Budget speech later this month."
just want to point out with this as well - if SARS find an error on your return they will penalise you for that error. you need to ensure that your return is as accurate as possible. if there is an amendment on the return, SARS will penalise you for this as well.
