The closing date for tax return submissions is fast approaching. With 31 October a mere six weeks away, the South African Revenue Services (SARS) is urging companies and individuals with outstanding tax returns to comply.
Stefani du Preez, director of Innovative Accounting Solutions, a subsidiary of the Innovative Solutions Group, says non-compliance can translate into significant Administrative Penalties (Admin Penalties).
“Levied under Section 210 of the Tax Administration Act, these penalties are dependent on the taxpayer’s taxable income.
“Failing to submit tax returns is an expensive risk that South African organisations cannot afford to take. Administrative non-compliance penalties include fixed amount penalties as well as percentage-based penalties.
“These penalties can range from anything between R250 and R16 000 a month for every month that the company or individual is non-compliant,” she notes.
Another concern is that if any tax amount is outstanding, or in dispute, SARS will not issue a tax clearance certificate, without which business owners are unable to submit tenders.
Du Preez says that regardless of whether companies agree or disagree with the admin penalty, it is advisable that they submit the outstanding return to stop further admin penalties.
“We have noticed that SARS has become more threatening on matters of non-compliance and some practitioners have cited day-late payments being hit with an automatic 10% penalty fee.”
With companies under constant pressure to reduce costs, streamline operations and increase sales, simplifying and standardising finance, taxation and accounting processes is critical.
Du Preez says by outsourcing the financial and accounting functions, companies can free up their management teams to focus on growing their businesses and not be caught up in a quagmire of administrative requirements.