SOUTH AFRICAN REVENUE SERVICE
MEDIA RELEASE NUMBER 10 OF 1999
21 APRIL 1999
ADJUSTMENT OF THE RATES OF INTEREST CONTAINED IN THE INCOME TAX ACT, 1962, THE CUSTOMS AND EXCISE ACT, 1964, AND THE VALUE-ADDED TAX ACT, 1991
In view of the recent decrease in all interest rates, it is considered desirable that the rates prescribed in the various tax Acts should be adjusted accordingly.
It is, therefore, hereby notified for general information that, the Minister of Finance, Mr T A Manuel has, with effect from 1 May 1999, adjusted the interest rates contained in the Income Tax Act, 1962, Customs and Excise Act, 1964, and Value-Added Tax Act, 1991, as follows:
- The Income Tax Act, 1962, currently provides that where an amount of tax is not paid on the date prescribed for payment, interest shall be payable at the rate of 19 per cent per annum on the outstanding amount. This rate will be adjusted to 16 per cent. On the other hand, where a refund of tax that has been overpaid is due to the taxpayer by the Commissioner, interest is currently payable by the Commissioner at the rate of 14 per cent per annum. This rate will be reduced to 12 per cent.
- The fringe benefit provisions contained in the Income Tax Act, 1962, provide that where a loan is obtained by an employee from his or her employer in terms of which no interest is payable or where the interest payable is less than the "official rate of interest", the amount which would have been payable if the loan was granted at the official rate, less the amount actually paid by the employee, will be taxed as a fringe benefit. Currently the "official rate of interest" is fixed at 19 per cent per annum. This rate will be reduced to 16 per cent.
- The Customs and Excise Act, 1964, provides that where any amount of duty that is payable in terms of the Act remains outstanding, interest is payable at the rate of 19 per cent per annum. This rate will also be reduced to 16 per cent.
- In terms of the Value-Added Tax Act, 1991, interest on outstanding amounts of VAT is currently payable at the rate of 1,6 per cent per month. This amount will be reduced to 1,3 per cent per month. On the other hand, where any amount is refundable to the vendor in terms of the Act, interest is payable by the Commissioner at the rate of 18 per cent per annum. This rate will be reduced to 16 per cent.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
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