The Minister of Finance announced in his Budget Review of 1997 that greater use should be made of tax reference numbers of individuals and companies in order to assist the South African Revenue Service (SARS) in countering tax evasion. Various amendments were therefore introduced into the Act to facilitate this initiative.
Section 70 of the Act requires that companies should furnish the Commissioner with the names and addresses of persons to whom interest is paid. Due to the vast number of taxpayers not registered, section 70 was extended to require the company paying such interest to any person, to furnish, in addition to the name and address, also the identity number of any natural person or in the case of an insolvent or deceased estate, company, trust or any other form of corporate entity, to whom interest is paid, the registration number. Where a natural person is not in possession of a South African identity document, any other form of identification will also be acceptable.
Section 69 of the Act places a duty on a person to furnish information and returns, if required by the Commissioner. The provisions of this section were also extended with effect from 29 June 1998, to include the names and addresses of persons and, in the case of natural persons, the identity number, or in the case of any person other than a natural person the registration number. Any organisation (such as banks, estate agents or a firm of accountants or attorneys) acting as agent or operating a trust account on behalf of their principals will also be obliged to disclose the interest due to the principal in terms of section 69 or 70 of the Act.
It has come to the notice of this Office that a number of persons will not be able to comply with the amended provisions, due to, for example, a lack of the relevant information in respect of their clients, or as a result of computer systems not programmed to comply with the above-mentioned requirements.
This notice is issued with the object of bringing the amended requirements under the attention of all relevant taxpayers. Taxpayers should ensure that they comply with the requirements with effect from 1 March 2000. The information must therefore be submitted in respect of the 2001 and all subsequent years of assessment.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE