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Category:
Insurance
News /
Investments /
Maitland Group
/ February 2007
Boost Should Encourage Small Business Amnesty
Tipping the
scales
In his 2006 Budget, Trevor Manuel announced a tax amnesty for small
business.
 Uptake
of the amnesty has been slow, but draft regulations issued by SARS
at the end of January should boost the number of applications before
the amnesty closing date of 31 May 2007.
The draft regulations, which are subject to public comment, describe
the circumstances under which SARS may waive up to a maximum of R1
million of additional tax, penalties and interest (the tax debt)
owed by a taxpayer.
Boris Pelegrin, a tax lawyer with Maitland in Johannesburg says the
new incentive by SARS should “tip the scales” for many small
business owners contemplating applying for amnesty.
He says: “The current amnesty does not allow a small business to
apply for amnesty in respect of tax years for which it has already
been assessed. Thus, in circumstances where a business has already
submitted a return or a declaration in terms of which the business
was assessed for tax, it could also be liable to pay any additional
tax, penalties and interest.”
A potential amnesty applicant can now file an application to SARS
requesting the waiver by SARS of its tax debt. The application must
reach SARS on or before 31 May 2007 and be in a prescribed form
which is yet to be released.
There are circumstances where SARS will not be able to allow a
waiver of a tax debt which are:
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The Sheriff of the High Court has already attached the assets of
the applicant in execution of a writ of execution; or
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Sequestration or liquidation proceedings have already been
instituted against the applicant; or
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SARS has already issued a notice to the applicant relating to an
audit or investigation by SARS unless such notice has been
withdrawn or the audit was concluded.
Pelegrin says the draft regulations are to be welcomed, as they show
SARS is “showing willing on the part of small business”. The
regulations are open for comment until 9 February 2007.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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