The South African Revenue Service (SARS) has warned taxpayers that they face steep penalties for missing tax return deadlines.<\/p>\n\n\n\n
These penalties escalate based on a taxpayer’s income, reaching up to R16,000 per month for high-income earners\u2014those earning above R500,000 per year.<\/p>\n\n\n\n
The warning was contained in the revenue service’s August Tax Practitioner newsletter, outlining how its penalties work.<\/p>\n\n\n\n
SARS uses a dual system of fixed-rate administrative penalties and interest charges, meaning that missing a deadline can lead to a penalty that escalates over time.<\/p>\n\n\n\n
If an income-tax return is submitted after the end of the filing season, administrative penalties can be imposed and can increase monthly.<\/p>\n\n\n\n
Notably, these penalties are not one-off, and can be repeated monthly until the missing tax return is submitted or until the limit is reached<\/strong>.<\/p>\n\n\n\n The limit on monthly penalties is up to 35 months if SARS has the taxpayer’s address, and 47 months if the address is outdated.<\/p>\n\n\n\n The monthly penalty amount depends on the taxpayer’s earnings, starting at R250 per month for low earners.<\/p>\n\n\n\n Taxpayers in this bracket could have to pay R8,750 in administrative penalties once the 35-month limit is reached.<\/p>\n\n\n\n The amount then increases for those earning between R250,000 and R500,000 per year, who could receive a R500 penalty for every month a tax return is not submitted.<\/p>\n\n\n\n The penalty then scales upward for high-income earners (over R500,000 per year), with the maximum penalty reaching R16,000 per month.<\/p>\n\n\n\n This means that a high-income earner could have to pay R560,000 in penalties for not submitting a tax return if they are in the highest-earning bracket and do not submit within 35 months.<\/p>\n\n\n\n South Africans who earn more than R500,000 a year are legally obligated to file tax returns. Failing to do so is a criminal offence.<\/p>\n\n\n\n