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IN 68 (2) TAX ADMINISTRATION ACT: INTERPRETATION NOTES IN 68 (2)
of interest on the outstanding amount of a tax debt or refund in respect of understatement penalties or a jeopardy assessment, the following provisions of the Act apply:
• Charging of interest: under section 187(1), if the tax debt is not paid in full by the effective date, interest accrues on the amount of the outstanding balance of the tax debt at the rate provided under section 189, and for the period provided under section 188.
• Effective date: The effective date for purposes of the calculation of interest in relation to—
— an understatement penalty, is the date by which tax for the tax period should have been paid [see section 187(2)(e)]. — a jeopardy assessment, is the date for payment speci ed in the jeopardy assessment [see section 187(5)].
• Period over which interest accrues: Interest is charged for the period from the effective date to the date the tax is paid [see section 188(1)].
• Rate at which interest is charged: The rate at which interest is payable under section 187 is the prescribed rate, which is the interest rate that the Minister may from time to time x by Notice in the Government Gazette under section 80(1)(b) of the Public Finance Management Act, 1999 [see section 189(1), (3) and (4)].
• Remittal of interest: A taxpayer may request a senior SARS of cial to direct that so much of the interest as is attributable to prescribed circumstances beyond the taxpayer’s control, is not payable by the taxpayer. These circumstances are limited to a natural or human-made disaster, a civil disturbance or disruption in services; or a serious illness or accident [see section 187(6) read with 187(7)]. As section 187(6) refers to interest imposed under section 187(1), the remittal only applies to interest payable on a tax debt in respect of understatement penalties or a jeopardy assessment as set out above.
Section 187(1) also regulates the accrual of interest on refunds payable by SARS. However, because section 188(3) did not come into operation such interest will only accrue once section 188(3) comes into operation.
4.2 Provisions of the Act relating to the accrual of interest that did not commence 4.2.1 Provisions of Chapter 12
Sections 187(2), (3)(a) to (e) and (4), 188(2) and (3) and 189(2) and (5) did not commence on 1 October 2012. These provisions relate to the accrual of interest on tax debts and refunds in respect of tax types for purposes of which the accrual of interest is regulated under the other tax Acts.
4.2.2 Provisions of Schedule 1 to the Act
For purposes of the new regime for the accrual of interest under Chapter 12, most of the interest accrual provisions contained in the tax Acts would have been repealed upon commencement of Schedule 1 to the Act. As some of the provisions of Chapter 12 regulating the accrual of interest have not commenced, the provisions of the other tax Acts regulating the accrual of interest remain in force until the President determines by proclamation when the relevant provisions of Schedule 1 come into operation.4
Because the de nition of the term ‘tax’ in section 1 includes ‘interest ...under a tax Act’, the other provisions of the Act are applicable in respect of interest that will still accrue under the tax Acts on tax debts and refunds (when applicable), for example:
• Information gathering under Chapter 5;
• Con dentiality under Chapter 6;
• Advance rulings under Chapter 7;
• Assessment under Chapter 8;
• Dispute resolution under Chapter 9;
• Liability and payment under Chapter 10;
• Recovery under Chapter 11;
• Write-off or compromise under Chapter 14; and
• Sanctions under Chapters 15, 16 and 17.
The table in Annexure B sets out the provisions of the Schedule to the Act that have not commenced or have commenced except to the extent that they relate to interest.
Legal and Policy Division
SOUTH AFRICAN REVENUE SERVICE Date of rst issue: 16 November 2012
Annexure A – Proclamation 51 Government Gazette 35687 of 14 September 2012
PROCLAMATION
by the
President of the Republic of South Africa
No. 51, 2012
DETERMINATION OF THE DATES ON WHICH CERTAIN PROVISIONS OF THE TAX ADMINISTRATION
ACT, 2011 (ACT 28 OF 2011) MUST COME INTO OPERATION
In terms of section 272 of the Tax Administration Act, 2011 (Act 28 of 2011), I hereby, determine the dates on which
speci c provisions of the Act must come into operation, as set out in the Schedule hereto.
Given under my Hand and the Seal of the Republic of South Africa at Pretoria this Eighth day of September, Two
Thousand and Twelve.
PRESIDENT
By Order of the President-in-Cabinet
578 Juta’s IndIrect tax 2016