MINISTRY OF FINANCE
MEDIA RELEASE

22 OCTOBER 1996

RELIEF IN RESPECT OF CERTAIN TAX, INTEREST, PENALTIES AND ADDITIONAL TAX

During the period 19 July 1995 until 31 January 1996, a tax amnesty in terms of the Tax Amnesty Act, 1995 (Act No 19 of 1995), applied in respect of income tax, employees tax, Value-Added Tax (VAT) and certain other taxes. The purpose of the amnesty was to broaden the tax base as well as to enable defaulting persons to legitimise their tax position without having to bear and excessive tax burden which would have discouraged them from participating in the amnesty.

This amnesty was, however, somewhat restrictive in the sense that in order for a person to qualify, such person had to have been unregistered or his whereabouts unknown to the Commissioner as at 26 April 1994 for all three of the main taxes, namely, income tax, employees tax and VAT. This was found to be and inhibiting factor for persons applying for the amnesty and a number of applicants had to be turned away.

The previous amnesty also did not address the situation of registered taxpayers whose arrear taxes, interest, penalties and additional tax in respect of the 1994 and prior years of assessments or periods up to 28 February 1994, had reached such proportions that they were faced with the situation that they were (and still are) unable to redeem the outstanding amounts.

It is therefore proposed that a Bill be introduced into Parliament this session providing for the introduction of the following categories of relief:

• Category 1
  
  The re-introduction of the previous amnesty in a revised format in respect of persons who were not registered as 26 April 1994 or whose whereabouts were unknown to the Commissioner as at that date for purposes of
  • income tax;
  • employees tax; or
  • VAT.
  The relief will comprise of the following
  • no liability for such taxes prior to 28 February 1994; and
  • the waiving of certain interest, penalties and additional taxes.
  
  
• Category 2
  
  Registered persons who come forward during the relief period and disclose full and true details in relation to their
  • income tax for the 1994 and prior years of assessment;
  • employees tax for periods up to 28 February 1994; or
  • VAT for tax periods up to 10 March 1994 (or certain circumstances 10 April 1994),
  will qualify for relief in respect of certain interest, penalties and additional tax attributable to taxes imposed as a result of such disclosures.
  
  
• Category 3
  
  Registered persons liable for interest, penalties and additional tax in relation to
  • income tax for the 1994 and prior years of assessment;
  • employees tax for periods up to 28 February 1994; or
  • VAT for tax periods up to 10 March 1994 (or in certain circumstances 10 April 1994),
  will qualify for certain relief in respect of such interest, penalties and additional tax if they comply with conditions with regard to the rendering of returns.
  
  
• Category 4
  
  Persons liable for penalties in respect of sales tax will qualify for relief in respect of such penalties.
  

• legitimise their tax affairs without being penalised; and
• settle certain arrear tax debts during a relief period without having to pay interest, penalties or additional tax which accumulated in relation to such debts.

The relief period will commence on 1 November 1996 and extend until 28 February 1997.

ISSUED BY THE MINISTRY OF FINANCE
CAPE TOWN