Beware the taxman cometh, first gently and then with a big stick. In doing so he hopes to reduce the high tax burden on individuals by spreading the load and to provide more money to improve the lot of the poor.
Before applying the big stick Minister of Finance, Trevor Manuel and his tax collectors are giving all errant taxpayers one final chance to clear up their tax liabilities. After February 28 next year all tax dodgers will be pursued relentlessly by the taxman and charged with criminal offences.
Chief tax collector Piet Liebenberg warned that people should not think that because they got away with eluding the taxman in the past they will continue to escape the net.
The tax collection service overhaul is now well underway and soon tax inspectors will be combing the country with added incentives to track down tax dodgers. Already this year an additional R900 milion has been recovered.
Among other things under consideration are incentives paid to tax investigators on the recovery of tax. And if you are caught Liebenberg intends not only to take his dues with penalties, but he will also charge you in court and ensure you are branded publicly as a tax offender.
Liebeneberg told Personal Finance this week that this method worked in Mexico where people faced the ignominy of being branded as common criminals. Both he and Manuel believe that following the introduction of legislation next year to improve efficiency of the tax collection services they will have the ability to carry through on their threats.
Manuel and his deputy, Gill Marcus, warned at a Press conference this week that this tax amnesty would be the last. If you do not own up this time the taxman will not only take the tax due, but will charge penalties which can be up to three times what you owe.
Liebenberg said a communications programme would be launched involving business and labour. In the campaign the benefits of paying tax would be explained.
Marcus said that people who had not paid taxes because they were opposed to apartheid no longer had an excuse. There was now a new government and they had to register as taxpayers. Manuel said many people were in violation and "no nation can allow this type of impact on the integrity of the tax system".
The tax amnesty will run from November 1 to February 28.
Tax defaulters wanting to apply for tax amnesty should contact their closest Receiver of Revenue office. If you have never registered as a taxpayer you can collect an amnesty application form from your local Receiver's office. If you have been hiding away from the taxman because your are in default on taxes make an appointment to see your local Receiver. From November 1 (when the amnesty should come into effect) you can call toll free on 0800 1192 000 for any enquiries you may have.
TAX AMNESTY DETAILS
Who qualifies:
The 404 000 registered, but errant income taxpayers;
The unknown number of people who have never registered as taxpayers;
Those people who owe either Value Added Tax (VAT) or General Sales Tax.
There are four categories:
Category one: Those people who were not registered as taxpayers on April 26, 1994 and whose names were not known to the taxman for the purposes of paying income tax, employees' tax (PAYE and Site) or VAT.
This category also applies to "missing persons" who were on the tax register but whose whereabouts were unknown.
This category will not have to pay any taxes due prior to February 28, 1994 but they will be liable for taxes after this date.
However, they will not have to have any interest, penalties or additional taxes if they pay up all due tax before February 28 next year.
Category two: Registered taxpayers, employers and vendors, who are on the tax register, but who had under-declared any amount in periods up to February 28, 1994.
They are now given the chance to pay all tax due up to that date without having to pay interest, penalties and additional taxes if they make arrangements to pay the outstanding capital before February 28 next year.
Category three: Registered taxpayers who are liable for interest, penalties and additional taxes for income tax for 1994 and prior years of assessment; employees tax for periods up to February 28, 1994 or VAT up to March 10, 1994. This group also includes taxpayers who have been investigated by the taxman.
This group will not have pay interest, penalties and additional taxes if they make arrangements to pay the tax before February 28 next year. This even includes people who have been investigated.
Category four: Taxpayers liable for penalties for sales tax will not have to pay penalties if they pay what they owe before February 28 next year.