Taxpayers who file their 2021 annual returns late will receive an administrative penalty on 1 December 2021. Previously a taxpayer would need 2 or more years outstanding in order to receive an admin penalty. This has now changed.

An Administrative Penalty (Admin Penalty) is a penalty levied under Section 210 of the Tax Administration Act (TAA). The Act prescribes the various types of non-compliance which are subject to fixed administrative penalties.

Penalty amounts range from R250 per month to R16 000 per month and re-occur monthly for up to 35 months until the outstanding returns are filed. Here are the detailed penalty amounts.

1. Item2. Assessed loss or taxable income for preceding year3. Penalty
(i)Assessed lossR250
(ii)R0–R250 000R250
(iii)R250 001–R500 000R500
(iv)R500 001–R1 000 000R1 000
(v)1 000 001–R5 000 000R2 000
(vi)R5 000 001–R10 000 000R4 000
(vii)R10 000 001–R50 000 000R8 000
(viii)Above R50 000 000R16 000

The finance minister tabled the Taxation Laws (Bill 22 of 2021) and Tax Administration Laws (Bill 23 of 2021) in parliament on 11 November. This will allow the new penalty regime to apply to late EMP501 returns also.

From the SARS website:

“The deadline for individual non-provisional taxpayers is 23 November 2021. Taxpayers in the auto-assessment population, who neither accepted nor edited and submitted their simulated assessments by this date, will receive an original assessment based on an estimate in accordance with section 95 of the Tax Administration Act, 2011.  This assessment is not subject to objection and appeal. However, a taxpayer who is not in agreement with his or her assessment may file a complete and accurate tax return within 40 business days of the assessment date. Such a return will be late, which means that normal late submission penalties and interest (where applicable) will apply.”