“You don’t pay taxes–they take taxes.” – Comedian Chris Rock
Many South African tax payers are stretched to their absolute limits as they find the cost-of-living continues to rise and salaries don’t keep pace. The last thing your business needs is to go into a dispute situation with SARS.
Many business owners are unaware of the Voluntary Disclosure Programme (VDP) that SARS offers. Businesses and individuals who owe SARS money but have not declared it (i.e. by not submitting PAYE, VAT or Income Tax Returns) can now do so under the VDP and save by not being charged interest or penalties for late filing.
Similarly the Tax Administration Act which deals with the waiving of Taxes owed to SARS and also Compromises on Debt owed by Individuals, Trusts, Close Corporations and Companies. SARS may be willing to write off or reduce taxes, penalties, interest and even additional tax owed to SARS.
The term “compromise” is defined as an agreement;
That is entered into between SARS and the taxpayer where the debtor undertakes to pay an amount which is less than the full amount of the tax debt due to SARS in full settlement of the debt SARS agrees to write off the remaining portion of the debt permanently.
The basis for the compromise is that, where a taxpayer is unable to pay the debt, SARS will secure the highest return from the recovery of the taxes due, provided that the process was initiated by the taxpayer / registered tax practitioner.
Our content team hosted the SME.Tax experts as they unpack the process for you: