The tax amnesty for small business - as promulgated by the President on 25 July this year and contained in the Small Business Tax Amnesty and Amendment of Taxation Laws Act (Act 9 of 2006) takes effect tomorrow 1 August 2006.
The amnesty will introduce a window of opportunity to a wide spectrum of small businesses in South Africa to regularize their tax affairs.
The South African Revenue Service (SARS) will administer the amnesty which will run until 31 May 2007. SARS will have a dedicated Small Business Amnesty Call Centre in operation to assist taxpayers.
All information on the Small Business Amnesty is available now on the SARS website.
The Act provides for a small business tax amnesty in respect of the voluntary disclosure by an applicant of any failure to comply with revenue laws administered by the Commissioner of SARS.
The purpose and objective of the tax amnesty is to -
Taxpayers who qualify for amnesty
Any individual, unlisted company, close corporation, trust, co-operative or insolvent or deceased estate, of an individual which meets certain requirements may apply for tax amnesty. The requirements are that-
For purposes of the amnesty, the "2006 year of assessment" is defined as the year of assessment which ended during the period of 12 months from 1 April 2005 to 31 March 2006. Small businesses which are unregistered for tax purposes at the end of the 2006 year of assessment or which are registered taxpayers but whose income from, supplies made or employment taxes due in respect of small business activities have not been declared or have been understated during any year of assessment preceding the 2006 year of assessment will benefit from the amnesty.
Method of application
An applicant must apply for amnesty to SARS on a form which can be obtained at any SARS branch office in any of the 11 official languages in South Africa. Application forms must be submitted at any time during the period 1 August 2006 to 31 May 2007.
The applicant must, together with the application for tax amnesty furnish -
If it is not possible for the applicant to provide full particulars of any actual amounts in the application or in any return or statement relating to the application, the applicant may provide a reasonable estimate of those amounts. If an estimate is used this must be clearly indicated.
An amnesty levy is payable for amnesty. The amnesty levy is based on a sliding scale rate and is applied to the taxable income of the applicant for the 2006 year of assessment to the extent that the taxable income is attributable to any amount derived by the applicant from the carrying on of business.
|R -||R 35 000||No levy payable|
|R 35 000||R100 000||2% of the amount above R 35 000|
|R100 000||R250 000||R1 300 + 3% of the amount above R 100 000|
|R250 000||R500 000||R5 800 + 4% of the amount above R 250 000|
|R500 000||and above||R15 800 + 5% of the amount above R500 000|
All public enquiries about the amnesty can be referred to:
The SARS Small Business Amnesty Unit:
Call Centre number: 0860 12 12 20
Fax: 011 602 5502
Postal address: P O Box 292
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE