Commissioner's discretion to levy or remit penalties under the Tax Administration Act

By Beric Croome and Elsabe Strydom , ENS – Edward Nathan Sonnenbergs The Tax Administration Act 28 of 2011 (“TAA”) which came into effect on 1 October 2012 (bar a few specific sections) introduced two types of penalties, namely administrative non-compliance penalties and understatement penalties. This article considers whether the Commissioner of the South African Revenue Service (“SARS”) has any discretion to levy the above mentioned penalties as compared to any discretion provided for in the repealed penalty provisions as contained in the Income Tax Act 58 of 1962 (“ITA”). The taxpayer’s right to have the penalties remitted as per the TAA compared to the taxpayer’s right to remittance in terms of the ITA is also considered.

Do your objections and appeals to Sars correctly

Do your objections and appeals to Sars correctly ..… or else it could become very costly. The taxpayer in H R Computek (Pty) Ltd v CSars (830/2011) [2012] ZASCA 178 learnt a painful and expensive lesson about the importance of adhering to the rules and provisions relating to objection and appeal.  In particular, this judgement reminds taxpayers, not for the first time, that the grounds of your objection are extremely important because you are stuck with them all the way through the judicial process.

MTN International (Mauritius) v CSARS – HC23203/11

JUDICIAL REVIEW AND RAISING ASSESSMENTS By Heinrich Louw, Cliffe Dikker Hofmeyr On 31 January 2013, judgment was handed down in the North Gauteng High Court in the case of MTN International (Mauritius) Limited v Commissioner for the South African Revenue Service (as yet unreported, case no 23203/11). The facts were briefly as follows. The taxpayer was a Mauritian company, registered as a taxpayer with the South African Revenue Service (SARS), and a subsidiary of a South African holding  company. The taxpayer acquired various interests, notably in Nigeria and the Middle East, through loans obtained from its South African holding company.