Taxpayers cry foul over Sars’ penalties

They claim they were not required to file tax returns.

Several taxpayers have complained about receiving penalties for being noncompliant in the submission of tax returns for prior tax years. Penalties ranging between R500 and R2 000 have been issued, mainly for the nonsubmission of returns, despite taxpayers claiming that they were not required to file tax returns.

South African Revenue Service (Sars) spokesperson Sandile Memela says they should contact Sars with their specific cases.

Taxpayers who do not submit returns are charged a penalty, which can range from R250 to R16000 a month, depending on their taxable income.

This penalty will reoccur for every month the return remains outstanding, says Sars.

“It is advisable to submit the outstanding return to stop further admin penalties.”

Malebo Moloto, technical adviser at the South African Institute of Tax Professionals (Sait), says they started receiving complaints from their members relating to the penalties last week.

“It appears that the returns were never required, yet they [the taxpayers] are getting penalty assessments. It seems there is not clear communication or understanding about the reasons for the penalties,” says Moloto.

She suggests Sait members look at the year for which the taxpayer is now receiving penalties for nonsubmission and determine whether the taxpayer was required to submit a tax return.

TaxTim director Marc Sevitz says they are aware of Sars imposing penalties on “old returns not submitted” in the last few years. In most cases, the taxpayers were not required to file a return.

“Many no longer have the necessary information to prove that they did not need to file a return.”

This year, taxpayers whose gross income in the form of a salary or wages comes from a single source and does not exceed R350 000, do not have to file a return. However, that threshold has often been adjusted.

Moloto says if it was not required to file a return, yet the taxpayer has been issued a penalty assessment, they or their tax advisers should file a request for the remission of the penalties by way of eFiling or at a Sars branch.

Sevitz recommends that people always submit a tax return, whether it is required or not. “Look at what happens years later to people who thought they were not required to file a return.”