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Details of SARS small business tax amnesty to 31 May, 2007

South Africa’s Revenue Service has a Small Business Tax Amnesty until 31 May 2007.

The tax amnesty for small business was promulgated by the President on 25 July 2006 and is contained in the small business tax amnesty and Amendment of Taxation Laws Act (Act 9 of 2006) which came into effect on 1 August 2006. SARS has a dedicated Small Business Amnesty Call Centre in operation to assist taxpayers (see below).

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:

  • broaden the tax base

  • facilitate the normalisation of the tax affairs of small businesses

  • increase and improve the tax compliance culture

  • facilitate participation in the taxi recapitalisation programme.

Taxpayers who qualify for amnesty include 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:

  • the individual or entity must have carried on a business

  • the turnover (gross income) of the business (or businesses if the individual or entity carried on more than one business) during the 2006 year of assessment was not more than R10 million

  • in the case of a company or close corporation all the shares or members’ interests were held directly by individuals throughout the 2006 year of assessment

  • in the case of a trust all the beneficiaries of that trust throughout the 2006 year of assessment must have been natural persons.

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 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 been understated during any year of assessment preceding the 2006 year of assessment will benefit from the amnesty.

An applicant must apply for amnesty to SARS on a form obtained from any SARS branch office in any of the 11 official languages of South Africa. Application forms must be submitted at any time up to 31 May 2007. The applicant must, with the application for tax amnesty, furnish:

  • an income tax return for the 2006 year of assessment

  • a statement of all assets (at cost) and liabilities of that applicant as at the end of the 2006 year of assessment.

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.

From R - to: R35 000: no levy payable
From R35 000 to: R100 000: two percent of the amount above R35 000
From R100 000 to: R250 000: R1 300 + three percent of the amount above R100 000
From R250 000 to: R500 000: R5 800 + four percent of the amount above R250 000
From R500 000 to: and above: R15 800 + five percent of the amount above R500 000

All 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
E-mail: sbau@sars.gov.za
Postal address: P O Box 292
Groenkloof
0027