Previously SARS could only impose penalties if there were 2 or more returns outstanding between 2007 and 2020.
The law has changed, and SARS can now impose admin penalties even if there is only one tax return outstanding from 2021.
These penalties are applied to any area of non-compliance, which includes income tax, VAT or PAYE.
These penalties are charged monthly and before long can accumulate into quite a hefty amount, especially since SARS will continue charging the monthly admin penalties for up to a maximum of 35 months, or 47 months if the taxpayers address is unknown. So, it is also imperative that taxpayers update their contact details when filing their tax returns.
SARS uses the following scale to calculate the admin penalties:
| Assessed loss or taxable income for the preceding year | Penalty |
| R0 to R250,000 | R250.00 |
| R250,001 to R500,000 | R500.00 |
| R500,001 to R1,000,000 | R1,000.00 |
| R1,000,001 to R5,000,000 | R2,000.00 |
| R5,000,001 to R10,000,000 | R4,000.00 |
| R10,000,001 to R50,000,000 | R8,000.00 |
| R50,000,000+ | R16,000.00 |
If your taxable income for the year of assessment was R850,000 with 3 outstanding tax returns, the penalties SARS will impose will be R1,000 for each outstanding return, which means R3,000 in penalties will be charged every month until all outstanding returns are filed.
What to do if SARS has imposed admin penalties:
- We can assist you in filing the outstanding returns, thus ensuring compliance with SARS
- We will then apply for a request for remission of the penalty (RfR), which is a means for the taxpayer to dispute the admin penalty that was levied and request that the penalty is waived.
There is however no guarantee that SARS will waive the penalties, especially if the taxpayer has a history of non-compliance, so it is advisable to always remain compliant with SARS.
Even dormant companies should submit a Nil return to remain compliant with SARS and not attract admin penalties. Companies are also required to submit a Nil return with the Companies and Intellectual Property Commission (CIPC) to remain compliant and not face admin penalties and possible deregistration. This can become costly in the long run, so if the company is not likely to start trading again, it may be better to voluntarily deregister the company with CIPC and SARS.