Dear fellow taxpayer,

Welcome to this week’s bulletin.

We’ve just finished compiling your second tax update for this year and in it we’ve made sure that your Handbook is 100% up to date as far as the Revenue Laws Amendment Act is concerned. You should expect Tax Update 2/2009 to land in your mailbox on 17 April 2009...and that’s just the beginning!

The next few updates you’ll receive will be dedicated to tackling the issues in the Revenue Laws Amendment Act and the aim is to answer all your questions, such as:  

Is deregistering for income tax and registering for presumptive turnover tax the best move for your business?

What’s the best way of accurately calculating your taxable income estimate for provisional tax?

You can’t find the new administrative penalties in the Income Tax Act...so where did they come from?

Make sure you don’t miss a single update this year!

Mailbox
Answered by Matsika Vengesa of Tax Consulting SA

Does SARS have the power to thwart our share transfer?

Dear Matsika,

Does SARS have a legal basis to disallow the transfer of shares if the company in question has IT 14 returns outstanding?

Answer:

SARS’ powers in this regard are pretty far-reaching.

Section 70 of the Income Tax Act requires all companies to lodge an annual return. Failure to do so is a punishable offence (Section 75).

Further, Section 74 states that SARS may require you to furnish it with any information, either orally or in writing, which it may require to administer the Income Tax Act.

This is a very wide provision and basically empowers SARS to ask for whatever it wants and to implement punitive measures for failure to comply.

Until next week.
 
Regards
 
Nothando Hlatshwayo

Managing Editor
The Practical Tax Handbook