SOUTH AFRICAN REVENUE SERVICE
INLAND REVENUE
MEDIA RELEASE NUMBER 4 OF 1996

12 NOVEMBER 1996

TAX, INTEREST, PENALTY AND ADDITIONAL TAX RELIEF

In line with the announcement by the Minister of Finance on 22 October 1996, legislation entitled the "Final Relief on Tax, Interest, Penalty and Additional Tax Bill" has now been passed by Parliament.

The legislation grants the following relief to taxpayers, employers and Vat vendors:

CATEGORY 1

Persons who were either not registered or whose whereabouts were unknown to Inland Revenue on 26 April 1994 in respect of income tax OR employees' tax OR VAT, may apply for relief.

Such persons will not be liable to pay any tax which would normally have been payable in respect of tax years (income tax) or periods (employees' tax and VAT) up to 1 March 1994.

No interest, penalties or additional tax will be payable up until 28 February 1997 in respect of -

• the last two years of assessment which ended before 1 March 1996 i.e. in most cases, the 1995 and 1996 years of assessment (income tax); or
• periods between 1 March 1994 and 31 October 1996(employees' tax or VAT.

The person must make an application for relief to his local Receiver's office or to the Tax Relief Office (Box 402, PRETORIA,0001) within the relief period. Such application must be made on the official application form (available from all local Receivers as well as the Tax Relief Office) and be accompanied by a written undertaking by the person that he undertakes to comply with the relevant tax laws and to pay the outstanding taxes in respect of tax years/tax periods ending after 1 March 1994 within a maximum period of one year after the end of the relief period.

The following taxes are excluded from this relief:

• tax in respect of details known to Inland Revenue on 19 July 1995 (i.e. the commencement date of the previous amnesty); and
• tax arising from an investigation that commenced before 1 November 1996 of which the person was aware.

CATEGORY 2

Registered persons who submitted incorrect information with regard to their income tax OR employees' tax OR VAT in respect of years of assessment up to 1994 ( income tax) or periods which ended up to 28 February 1994 (employees' tax) or tax periods which ended up to 10 March 1994, or in certain circumstances, 10 April 1994 (VAT), may apply for relief.

The relief to be granted will be in the form of the waiving of interest, penalties and additional tax in respect of the tax which may result from the disclosure of the correct details for the abovementioned periods. No interest, penalties and additional tax will be payable up to 28 February 1997.

The person must submit the correct details in writing to his local Receiver of Revenue during the relief period.

CATEGORY 3

Registered persons who are liable for interest, penalties and additional tax in respect of years of assessment up to 1994 (income tax), periods up to 28 February 1994 (employees' tax) or tax periods up to 10 March 1994, or in certain circumstances 10 April 1994 (VAT), may qualify for the relief.

Interest, penalties and additional tax in respect of the abovementioned years of assessment or periods or tax periods will be waived.

The person concerned should, however, have already submitted all income tax returns up to the 1996 year of assessment or employees' tax declarations or VAT returns up to 31 October 1996 OR he must submit such returns or declarations before 28 February 1997 OR he must arrange during the relief period to submit such returns or declarations. No formal application is required for this relief.

CATEGORY 4

All sales tax penalties will be written off. No action is required by the persons concerned.

GENERAL

The relief period commenced on 1 November 1996 and ends on 28 February 1997.

Interest will recommence on 1 March 1997 in respect of any tax still outstanding on this date.

The method of allocating payments made by a person to Inland Revenue in respect of taxes owed is that payments are first off-set against interest and penalties owing and any balance is then used to reduce the capital amount. During the relief period this method will in effect be reversed in relation to the aforementioned years of assessment (income tax), periods (employees' tax) or tax periods (VAT) and the interest-free period up to 28 February 1997 , therefore, offers an ideal opportunity to such persons to redeem the capital amounts outstanding.

It should be noted that any amounts already paid in respect of tax, interest, penalties or additional tax before 1 November 1996 will not be refunded.

The relief covers only income tax, employees' tax, VAT and sales tax. All other taxes and duties are excluded from the relief measures.

Persons wishing to make use of the relief may contact their local Receiver of Revenue or the Tax Relief Office (Box 402, Pretoria), during the relief period.

A toll-free inquiry service will be available between the hours of 08:00 and 17:00 on weekdays for the duration of the relief period. The number is 0800-119-200.

ISSUED BY THE COMMISSIONER FOR INLAND REVENUE
PRETORIA