SOUTH AFRICAN REVENUE SERVICE
PRESS STATEMENT

1 SEPTEMBER 2004

SARS ANNOUNCES A DECREASE IN INTEREST RATES FOR PURPOSES OF LEGISLATION IT ADMINISTERS

Interest rates charged in respect of outstanding taxes, duties and levies, as well as interest rates paid by SARS on refunds in terms of the various Acts administered by the Commissioner for SARS are to decrease by one percentage point with effect from 1 November 2004.

This decrease follows from the change to the interest rate fixed in terms of section 80(1)(b) of the Public Finance Management Act, 1999 (PFMA), which was gazetted on Friday 27 August 2004 (Notice 1760 in Government Gazette No. 26693) and comes into effect on 1 September 2004.

In terms of the provisions of the Income Tax Act, 1962, the Value-Added Tax Act, 1991, and the Customs and Excise Act, 1964, the interest rates applicable for purposes of these Acts are linked to the PFMA interest rate. These Acts, however, also provide that there is a two month delay before a PFMA interest rate change applies for their purposes.

The following interest rates will therefore apply with effect 1 November 2004:

Income Tax Act, 1962

• The rate at which interest will be charged in respect of outstanding tax will decrease from 11.5% to 10.5%.
• The rate at which interest will be paid to taxpayers in respect of refunds of provisional tax overpaid will decrease from 7.5% to 6.5%.
• The rate at which interest will be paid to taxpayers on refunds of tax where an appeal is upheld in court or conceded by the Commissioner will decrease from 11.5% to 10.5%.

Value-Added Tax, 1991

• The rate at which interest will be charged in respect of outstanding VAT and at which interest will be paid to vendors in respect of VAT refunds will decrease from 11.5% to 10.5%.

Customs and Excise Act, 1964

• The rate at which interest will be charged in respect of outstanding customs and excise duties will decrease from 11.5% to 10.5%.

For further comment please contact Sechaba Nkosi at (012) 422 5046 or 082 465 2901.

ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA