SARS' fixed penalties for late tax filers

Have you submitted your tax returns yet? If not, the South African Revenue Services (SARS) has, under certain circumstances, the authority to penalise you.

Penalties are not a new concept for SARS. From the outset, a system was created to identify instances where individuals and businesses failed to submit their returns. Since that time, fees have applied for each return that’s submitted past the deadline.

Tip: Work out your income tax by using our tax calculator.

Below is a breakdown of the current fixed-penalty fees

Penalty fees

SARS notes, “The minimum penalty for an individual is currently R250 per return per month. This means that where four tax returns are outstanding, a minimum penalty of R1,000 per month will be issued.

“As the amount of the penalty varies according to a taxpayer’s assessed loss, or taxable income, for the tax year of assessment, the maximum penalty is R16,000 per month. However, to qualify for this penalty, your taxable income has to be in excess of R50 million in a certain tax year of assessment.

“This SARS penalty is still applicable for each month a return is outstanding.”

According to SARS,  the fixed-penalty fee is only imposed for late or non-submission of personal income tax (PIT - ITR12) and Corporate Income Tax (CIT - ITR14) annual returns. If your income before tax is not more than R500,000 per annum, you don’t need to submit your tax returns.

“Any taxpayer who does not submit their annual income tax return on time or at all, where there is an obligation to do so, and the requirements of the relevant public notices are met, the fixed amount penalty will be imposed by way of a penalty assessment,” says SARS.

The fee will be added on a monthly basis until all outstanding tax returns have been submitted and all outstanding monies have been paid.

“In addition, penalties that have already been added to your account for not submitting tax returns timeously will not be waived,” explains Danita de Wet, a tax practitioner with Tax Tips.

You can dispute the penalty

An option to dispute exists in the case of apparent error, or extenuating circumstances.

Should you want to dispute your penalty fees, you will need to submit a Request for Remission (RFR) form.

“This can be submitted when a taxpayer disputes any administrative penalties levied due to non-compliance. If the Request for Remission is disallowed or only a portion is allowed, you may still object to the decision made by SARS and even appeal the decision if you disagree with the outcome of the objection process,” says SARS.

The objection processes, however, can’t be utilised before the RFR is submitted and considered. RFR forms are obtainable from any SARS branch, or via eFiling.

Don’t ignore notices

“Administrative penalties recur each month that the taxpayer is non-compliant, up to a maximum of 35 months. Each recurring penalty will have a unique transaction number. When SARS is dealing with the objection or appeal, partial repayment may be allowed which means certain transactions may be settled,” SARS notes.

If you don’t respond to notices or demands in respect of the outstanding penalty, SARS is enabled under Section 99 of the Income Tax Act to recover money from your employer. This will be directly deducted from your salary, says De Wet.

Find a tax practitioner

It’s always beneficial to have a properly qualified tax practitioner guide and advise you through the process.

The practitioner can tell you whether any penalty issued is excessive or incorrect, and can help you lodge a dispute or objection. However, they will not help you remove penalties where a tax return is late or not submitted.