Van Wyk Blog

Relief for provisional taxpayers

2010-08-07T12:45:00.000-07:00

Pretoria - It will no longer be necessary to fill in a provisional tax return if one has no provisional income to declare.

This is the latest change to the provisional tax system which applies from the end of June this year.

Oupa Magashula, commissioner of the South Africa Revenue Service (Sars), said Sars issues more than 1.5 miilion forms twice a year. Many of these are either never returned or sent back marked "nil".

Magashula said that a large number of people who registered for provisional tax are now captured as provisional taxpayers. The commissioner said it is not easy to deregister. For that reason people who have no provisional income to declare will no longer need to submit the forms. Sars will also no longer automatically issue the forms, saving a great deal of time.

People who have something to pay should now request the forms themselves. According to a letter to taxpayers explaining the changes it is also no longer necessary to register as a provisional taxpayer to receive the form. Anyone can request a provisional tax form (IRP6).

Sars has also introduced a new "provisional tax statement" on which taxpayers can see what payments they have made. Sars has made specific arrangements for companies whose financial years end in December, January, June or July.

If Sars has already issued an IRP6 in the old format, the company can use it and it will be processed.

The company could also ignore the old form and request the new one. If no form has been issued, companies or individuals liable for provisional tax can request the new one. They can do so via the electronic submission system, the call centre or by visiting the nearest branch office.

- Sake24.com

Tax reward for BEE compliance

2010-07-20T11:35:00.000-07:00

Johannesburg - Tax incentive schemes are needed to reward black economic empowerment (BEE) compliant companies, Caird Consulting said on Tuesday.

"Treasury, the DTI and the BEE Advisory Council should introduce a scheme that will incentivise companies to not only comply, but to better the targets contained in the numerous BEE scorecards," Caird's BEE compliance partner Paul Janisch said.

The issues facing broad-based BEE was that the rewards for achieving targets were not realistic.

"At present a company is only rewarded with a BEE score for complying - and there is no guarantee that public or private sector business will follow as a result," he said.

The "big stick approach' tended to make companies focus more on compliance than transformation, which was needed to benefit those most marginalised.

The most effective method would be to introduce a reduction in corporate tax if certain measured goals were achieved, he said.

"People seldom react just because it is deemed to be lawful," Janisch said.

"They do it because there are either positive or negative consequences involved.

"Rewarding a company by reducing their tax liability because they have successfully employed and skilled a number of previously unemployable youth would have a lasting benefit all round."

Janisch said under these circumstances the cost of compliance would have to increase.

"It is very doubtful that Sars (SA Revenue Service) will simply take a company's word for their BEE performance.

"But this will ensure that the verification industry becomes more professional, substantially reducing the risk of fronting."

Janisch said it remained to be seen if the promises President Jacob Zuma made in his state of the nation address would materialise.

"Many of the socio-economic plans that he highlighted will only work if there is a reasonable commitment from both the public and private sectors."

Janisch said while the whole country would benefit in the long term if these goals were met, it was the short term wins that were going to continuously inspire both sectors to keep their eye on the long term goals.

"The B-BBEE (Broad-Based Black Economic Empowerment) Advisory Council is a new body that has been tasked to ensure that BEE is implemented across the economy.

"By taking a stronger approach we might actually see the fruits of Zuma's socio-economic goals coming into effect," he said.

- Sapa

Frustration as Cipro problems mount

2010-07-19T22:45:00.000-07:00

Johannesburg - The Companies and Intellectual Property Registration Office (Cipro) website will only be available intermittently until technical problems with a corrupted server have been resolved.

Cipro spokesperson Elsabe Conradie confirmed this in a statement which acknowledged that Cipro's infrastructure and systems have been causing "major frustration" for customers since December 2009.

A solution was found and the website was stabilised until two weekends ago, when the network system was upgraded.

"Unfortunately the upgrade took longer than anticipated and the Cipro website was only active on the following Wednesday.

"Since then Cipro again experienced downtimes and a team of experts consisting of staff members from the department of trade and industry, Cipro and an independent service provider were deployed to investigate the probable cause of the problem.

"It was discovered that one of the servers serving external customers was corrupted.

"Further investigation is continuing to determine what caused the failure of the server and finding a suitable solution," said Conradie. She acknowledged that Cipro's current infrastructure and systems are causing major frustrations to customers.

These difficulties coincide with controversy surrounding politicians and their business interests, all of which are all supposed to be registered with Cipro and up to date on its system.

The technical problems also coincide with Cipro's chief information technology officer, Michael Twum-Darko, being put on special leave following allegations of fraud in an IT contract with ValorIT worth R153m.

Cipro has objected to media reports that its CEO, Keith Sendwe, was also suspended.

According to Conradie, Sendwe has been on sick leave which is in no way connected to the fraud allegations.

Deadline postponed

Meanwhile, due to the website difficulties, Cipro says that the deregistration process for non-compliance to the submission of annual returns has been postponed until the end of April 2010, for both companies and close corporations.

Penalties for late payment will also be waived for February and March 2010.

Additional resources have also been made available to assist walk-in customers lodging annual returns.

- Fin24.com

Cipro: certified ID copies only

2010-07-19T22:42:00.000-07:00

Johannesburg - The Companies and Intellectual Property Registration Office (Cipro) now requires certified copies of identity documents for all applications and transactions.

"Cipro is constantly reviewing its business processes as well as related controls," acting CEO Lungile Dukwana said in a statement on Tuesday.

"The recent review confirms that Cipro processes and related business rules require new measures which will assist Cipro in fighting and reducing incidents of fraud and corruption that are usually reported to us", she said.

These control measures included providing certified copies of the green barcoded identity document.

In cases where more than one member was involved, such as a close corporation or company, all members or directors were required to provide certified copies of their identity documents, Dukwana said.

"All applicants and users of Cipro services are requested to ensure that from July 14 2010, certified copies of identity documents are included on submission of Cipro-related applications and transactions," she said.

A recent forensic probe showed that corruption and fraudulent practices had taken place at Cipro and that several fake companies had been registered to take advantage of tax returns.

Its CEO officer Keith Sendwe and chief information officer Michael Twum-Darko were suspended for allegedly rigging tenders.

- Sapa

Deadlines

2010-07-19T15:43:00.000-07:00

There are various deadlines that are awaiting us with South African Receiver of Revenue.

To be on time and correct is of the essence.

Provisional Deadline (end August)

Bi-Annual EMP501 Pay as you Earn Reconciliation Deadline (end October)

Personal Income Tax Deadline (end November)

Please ensure that you are on time, as the South African Receiver of Revenue has done all to assist you in meeting your Deadlines.

With Thanks,

Van Wyk Financial Services

Deductions from salaries and bank accounts

2010-07-14T11:31:00.000-07:00

Pretoria, 8 July 2010 – Following numerous queries regarding the announcement that SARS intends to deduct unpaid administrative penalties from salaries and bank accounts beginning in September, the South African Revenue Service (SARS) would like to reassure taxpayers that this planned step is a last resort that affects only a minority of non-compliant taxpayers.

The vast majority of compliant taxpayers who submit their tax returns on time and pay what is due to SARS will not be affected. The people who are affected by administrative penalties are those who for a number of years have failed to submit returns – a key step for the smooth and efficient functioning of our tax processes.

The administrative penalty system became law on 1 January 2009, after extended public consultation in 2008. In October last year SARS warned taxpayers with multiple outstanding returns that they would be affected by the first phase of the system’s implementation. These taxpayers were given a final opportunity to correct their non-compliance before penalties were imposed.

In January this year SARS issued the first round of penalties to approximately 230 000 taxpayers who had returns outstanding for multiple years.

The penalties range in amount from R250 per month per return outstanding to R16 000 per month per return depending on the income of the individual. Notices are issued every month to inform taxpayers of the escalating penalties.

To date 31 273 taxpayers have paid R33,8-million in penalties and 83 016 returns have been submitted. Regrettably, approximately 180 000 taxpayers have failed to respond to the penalty notices.

SARS has always clearly indicated that the purpose of imposing the penalties is not to raise revenue but rather to instil a broader culture of compliance among taxpayers. SARS has emphasised that the key principle involved is fairness to the majority of taxpayers who honestly comply with their obligations every year.

At the same time SARS has been fair and reasonable to the non-compliant taxpayer as well. Before appointing an employer to deduct the outstanding penalty, SARS built into the process steps such an opportunity to apply for remission of penalty and an opportunity to lodge an objection.

If a taxpayer has requested the remission of an administrative penalty, collection steps will generally not be taken until SARS has dealt with the request.

Non-compliant taxpayers were warned in October last year and again last week that in the event of penalties not being settled, their employers would be appointed as agents to deduct and pay over the outstanding administrative penalties due to SARS.

Taxpayers who have not provided their current addresses to SARS, as they are required to do in terms of the law, may not have received these penalty notices and are advised to provide their addresses as soon as possible.

The appointment of employers as agents is being done in terms of section 99 of the Income Tax Act, 1962. This section of the Act has been the subject of judicial scrutiny which has found that it is not unconstitutional and does not require a hearing before its application. This is a measure that SARS has had at its disposal for a long time.

SARS will be communicating with the affected employers who will be appointed as agents, informing them of the legal framework and process to deduct the outstanding penalty from the taxpayer’s salary, depending on the circumstances of the taxpayer and based on the most recent information SARS has available.

If the employer foresees an affordability problem a mechanism will be put in place for the employer to communicate with SARS to reduce the amount to be recovered each month. These mechanisms are over and above the mechanism that currently exists for the taxpayers to request remission of the penalties.

If the response from non-compliant taxpayers remains unacceptable, SARS will be forced to extend the appointment of agents to banks holding funds on behalf of these taxpayers.

SARS believes that the non-compliant taxpayers concerned have been afforded more than sufficient opportunity to correct their non-compliance. It is simply not fair to the majority of compliant taxpayers that a minority should continue to get away with what is essentially a crime.

JSE rallies on rate cut hopes

2010-07-13T13:01:00.000-07:00

Johannesburg - The JSE made broad strong gains on Tuesday on expectations of a rate cut and Alcoa's better-than-expected financial results which sparked a rally on Wall Street on Monday.

The JSE all share index rallied 1.12%, with resources 1.00% stronger. Platinum miners gained 1.46%, and gold miners rose 0.53%. Banks climbed 1.89%, financials added 1.41% and industrials were up 1.08%.

The rand was bid at R7.54 to the dollar from R7.60 at the JSE's last close. Gold was quoted at $1 214.49 a troy ounce from $1 198.41/oz at the JSE's previous close, while platinum was at $1 524.00/oz from $1 520.50/oz before.

A trader said the local market firmed on the back of Monday's rally on Wall Street, which benefited from Alcoa's better than expected financial results.

Another trader said local investors were pricing in a cut in the repo rate.

The latter trader said there was no news flow to justify the big jump in share prices, noting that investors could be hunting for bargains.

Dow Jones Newswires reported that investors poured into US stocks on Tuesday, as encouraging earnings reports sent the Dow Jones Industrial Average climbing for a sixth straight session.

Better-than-expected earnings from aluminum giant Alcoa and railroad operator CSX lifted expectations for corporate strength in the second quarter and boosted materials and industrial stocks.

The Dow Jones Industrial Average rose 128 points, or 1.3%, to 10344 in recent trading, with all of its 30 components in the black. Leading the measure's climb, Caterpillar gained 2.4% and 3M rose 2.2%.

The Nasdaq Composite index climbed 1% to 2219. The Standard & Poor's 500-share index rose 1.2% to 1092, with all of its sectors rising. Industrial and financial sectors lead the gains.

- I-Net Bridge "News24.com"