PROVISIONAL TAX THE LAW AND PRACTICALITIES
SARS does not always need to change tax rates to improve collections. One of the most effective ways to bring money in earlier is to place pressure on provisional tax payments. Provisional tax is already a major collection point. The latest SARS statistics show that company provisional tax alone amounted to approximately R306.5 billion. That represents about one-sixth of total SARS tax collections. This means that even a small tightening by SARS can have a major effect: A 5% increase in company provisional tax collections would move approximately R15.3 billion forward. A 10% increase would move approximately R30.6 billion forward. That is why practitioners should expect SARS to pay far more attention to provisional tax estimates, reduced estimates, basic amounts, penalties, interest and the justification behind IRP6 submissions.
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