The South African Revenue Service (SARS), strives to always clarify and remind taxpayers of their obligation in law, as well as the potential consequences should they not comply.
Notwithstanding the legal mandate of SARS to act against taxpayers who fail to comply, it is generally expected that we first remind, and give the taxpayers the opportunity to comply, ahead of SARS commencing legal action.
Tax season for non-provisional taxpayers drew to a close on Monday, 23 October 2023.
The SMS message that was sent out earlier this week, in relation to outstanding returns, fell short of the high professional standard we seek to uphold. SARS therefore sincerely apologises for the manner in which this matter was handled, the frustration it may have caused honest taxpayers, and any inconvenience caused.
“The intended message was meant as a genuine and helpful reminder to taxpayers to file tax returns due and fulfil their legal filing obligation. Most taxpayers are honest and ordinarily appreciate such reminders. Honest taxpayers should not feel threatened by SARS but, unfortunately, the way the message was crafted had this effect.,” said SARS.
“The message regrettably refers to possible prosecution of taxpayers for their failure to file their returns as they are legally obligated to do.”
While SARS is empowered by law to remind all taxpayers that are still registered with SARS of their legal obligation to file their relevant returns by the due date, SARS does not commence legal action before engaging with taxpayers.
It is worth noting that a company is expected to file a return if it meets the following conditions:
(i) derived gross income of more than R1 000;
(ii) held assets with a cost of more than R1 000 or had liabilities of more than R1 000, at any time;
(iii) derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eighth Schedule of the Income Tax Act applies; and or
(iv) had taxable income, taxable turnover, an assessed loss or an assessed capital loss.
Taxpayers who meet the above conditions must file their returns. “Unfortunately, SARS’ reminders are ignored by some taxpayers, which means that their situation escalates to levels where legal action may be required. Even then, they are reminded about their obligation to file the outstanding returns.
SARS has in the meantime put the SMSs on hold.
“In this respect, SARS wishes to remind taxpayers that it remains their legal obligation to ensure that their tax affairs are regularised, where these are not in order. SARS will engage with taxpayers with respect to outstanding returns at the appropriate time.
“We need to be clear that taxpayers who continue to ignore reminders and fail to regularise their tax matters, in accordance with the law, will eventually have to answer for their continued noncompliance.
“Lastly, SARS appreciates the effort of honest taxpayers who diligently comply and fulfil their obligations. We value your valuable contribution to the important work incumbent on us.”