The Exchange Control Amnesty and Amendment of Taxation Laws Act, 2003, provides for an exchange control amnesty and a related tax amnesty. The tax amnesty covers income tax, donations tax and estate duty in respect of funds earned or transferred offshore. It does not cover other taxes that SARS administers, such as Pay-As-You-Earn (PAYE) and Value-Added Tax (VAT).
Where people had committed offences in terms of taxes that are not covered by the amnesty, these offences often acted as a bar to making an application for amnesty. The amnesty law was changed in December 2003 to accommodate these people without affecting their liability for the taxes that are not covered by the amnesty.
People who have evaded taxes that are not covered by the amnesty and have taken these amounts offshore may now apply for amnesty. They must approach their SARS offices within 60 days of applying for amnesty to declare the evaded tax and make arrangements for payment. If they do not, their amnesty applications will be rejected. If their amnesty applications are approved but they do not regularise their VAT and PAYE obligations, the approvals will be void.
To encourage these people to come forward, SARS will not raise additional tax or penalties on the evaded taxes that they now disclose or prosecute them for the evasion. Specific SARS officials have been identified to deal with their cases. These officers have been authorised to make practical arrangements regarding the calculation of interest on the evaded tax and to negotiate the payment period for outstanding amounts.
A list of the identified staff at SARS offices is attached to this media release. It also appears on the Amnesty Unit (www.amnestyunit.gov.za) and SARS (www.sars.gov.za) websites.
Potential applicants are once again encouraged to take advantage of this very generous opportunity to regularise [their] exchange control and tax affairs. Those who fail to do so will face the severest penalties. The closing date for applying for amnesty is 29 February 2004.
People who are interested in the technical detail of the change that was made to the amnesty law will find it in section 219 of the Revenue Laws Amendment Act, 2003. Further details are available in the Explanatory Memorandum on the Revenue Laws Amendment Bill, 2003. Both documents are available on the SARS website.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE