SARS issues 7 000 penalty letters

Friday, June 26, 2009

Pretoria - The South African Revenue Service (SARS) has issued 7 000 penalty letters to employers in the country for failing to submit their payroll information by the 31 May deadline.

In a statement issued on Thursday, SARS said it had begun issuing the penalty letters on Wednesday.

"Employers have a legal obligation to submit an annual payroll reconciliation to SARS that reflects the taxes they have deducted from the salaries of their employees - PAYE and SITE - and the payment of these taxes to SARS on behalf of their employees," said SARS spokesperson Adrian Lackay.

He added that employers - who include public and private institutions, state-owned enterprises, academic institutions and political parties - who have failed to honour the deadline, will face up to 10 percent of their payroll tax deductions per annum.

The number of the employers at "this stage may be as high as 65 000".

SARS said that efforts are being made to serve 4 000 summons' on employers, who have failed to make PAYE payments to SARS, which they have deducted from employee salaries. "In such instances further legal action will follow," said Mr Lackay.

The Revenue Services said it took a strong view when employers withheld PAYE deductions instead of paying it to SARS which, it said, essentially amounted to the abuse of the fiscus to finance businesses.

Mr Lackay said that by the deadline, over 193 000 companies of various sizes had submitted their payroll information to the revenue services.

"This was an increase of 10 percent from last year," he said, adding that the documents contain the income information of about 12 million workers.

"SARS wants to thank these businesses and their owners for contributing to our national effort to improve the levels of tax compliance in the country," said Mr Lackay

The taxman also reminds taxpayers that the filing period of the 2009 Tax Season to submit their returns starts next Wednesday.