Page 57 - GA Maclachlan Tax Guide 2024

Percentage based penalties
The percentage based penalty is imposed where SARS is satisfied that the
taxpayer has not paid the tax as and when required under a Tax Act� This penalty
is equal to a percentage of the tax not paid� The following percentage based
penalties will be imposed:
Tax type Penalty percentage
Income tax 10% under certain circumstances (i�e� sec 35A)
Provisional tax ■ 10% on the late or non-payment of provisional tax
■ 20% if provisional tax estimate has been understated
(the non-submission of the return within four months
after year-end is deemed to be a submission with an
estimate of Rzero)
Employers’ and ■ 10% if return has not been filed
employees’ tax ■ 10% if employee tax and/or UIF has not been paid
■ 10% if fringe benefits have not been indicated on
employee’s tax certificates
Value-Added Tax 10% on the late payment of VAT

Understatement penalties
The understatement penalty is a percentage in accordance with the table set
out below and is applied to the shortfall of the tax (including an employment tax
incentive)� It applies to all taxes and could be charged when there is a default
in rendering a return, an omission from a return, an incorrect statement in a
return and, if no return is required, the failure to pay the correct amount of tax�
Excluded from the understatement penalties are penalties resulting from a “bona
fide inadvertent error”�
The following definitions relate to the understatement table below:
■ Substantial understatement means a case where the prejudice to SARS or the
fiscus exceeds the greater of 5% of the amount of ‘tax’ properly chargeable or
refundable under a Tax Act for the relevant tax period, or R1 000 000
■ Repeat case means a second or further case of any of the behaviours listed
under the table above within five years of the previous case
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