Recently in Taxation Category

It is great to see that an additional R12.2 billion will be spent on child support grants, and an extra R15.1 billion for teachers (that could be nine or twelve zeros for a billion - nine I presume) but what does that mean to me and you.  R12.2 billion sounds much better than an in increase of 4.17% or R10 per month for each child support grant - not even keeping up with inflation!

• Personal income tax relief for individuals amounting to R6.5bn.This partially compensates for inflation.
• Limited voluntary disclosure option for taxpayers in default
• Exchange control reforms proposed
• Interest-income exemption increased to R22 300 per year and to R32 000 for those over 65
• Standard Income Tax on Employees (SITE) system to be discontinued
• Congestion, pollution and landfill taxes considered
• Niggles remain for proposed dividend tax National Health Insurance scheme delayed for about five years
• "Tips for Pravin" to continue, using Facebook and other new forms of media
• Gambling winnings being exempt from personal income tax to be reviewed - impacts on casino, online gambling and lotto winners
• Wage subsidy for young people
• Clamp down on company car fringe benefits 

For a more detailed look at the highlights of this years budget click here (pdf file 118kb)

"Those boxes at the back of the garage marked Accounting Records: ABC CC 1995...can I thow them away?"

How long do you need to keep those dust filed, moth eaten records that one has ever or will ever look at?

As part of SARS' recent media release emphasising the implementation of its new tough penalty regime, SARS is threatening to take the money from your bank or your employer. 

"Can they do this?" you ask in despair.

On 14 October 2009, SARS issued a media release indicating that it would be enforcing the new penalty regime with effect from 23 November 2009.  In summary, non-compliant taxpayers will attract a monthly penalty based on their income of at least R250 per month for EACH outstanding return.  The details of these penalties can be found here.

Chances are, you are guilty on at least one these:

• Not registering as a taxpayer
• Not informing SARS of your change of address
• Not appointing a public officer for your CC or company
• Not submitting a tax return on time
• Not supplying information requested on time
• Not submitting monthly PAYE declarations (if you are an employer)
• Not providing SARS details of an employee
• Not providing an employee with an IRP5
• Providing an employee with an IRP5 before you have submitted your IRP501

Any of the above will result in SARS levying a penalty of between R250 and R768 000.

SARS's deadline for the submission of individual tax returns done manually is the 18th September 2009.   If use is made of the electronic system 'e-filing', this deadline is extended until the 20th November 2009.  Not meeting this deadlines will likely result in SARS imposing a penalty on you. 

For assistance in completing your tax return, please contact Wayne on 033 330 7333.

With effect from March 2010, the proposed minimum threshold for Vat is R50,000.  Any vendors who do not meet this threshold will be required to deregister for VAT.  As with all Vat registrations - forced or voluntary, any assets which you have claimed a deduction against will attract VAT on deregistration.

This could have significant cashflow implications which should be planned for.

I'm proud to pay taxes

I could be just as proud for half the money

Arthur Godfrey

Many businesses manage their VAT cashflow by altering invoice dates or misrepresenting their output & input taxes.  This is illegal  and SARS is likely to impose heavy penalties - up to 200% - if discovered.

There are legitimate ways to manage your VAT cashflow...

SARS has provided a small break to those who have company cellphones and computers. With the changes to the Revenue Law Amendment Act, SARS will no longer calculate any fringe benefit for the use of company cellphones and computer equipment. There are as usual limitations...