In accordance with Section 179(1) of the Tax Administration Act, the South African Revenue Service (SARS) has the authority to issue a notice to third parties, requiring them to remit funds to SARS on behalf of a taxpayer to settle outstanding debt. However, SARS recently encountered technical issues in its Employer e@syFile system, resulting in employers not being notified of third-party (AA88) appointment and default notices. This unintentionally placed several employers in a non-compliant (default) status.
SARS has undertaken to rectify the issue promptly. In April 2023, the tax authority applied necessary fixes to the Employer e@syFile system, successfully resolving the technical problems.
Commencement of follow-up procedures
SARS has decided to commence follow-up procedures on employer non-compliance (payment defaults) arising on or after the 1st July 2023. This delay SARS believes will allow employers sufficient time to address any outstanding issues and make necessary payments, while also providing SARS with a clear starting point to gauge compliance.
Relief for employers
In light of the technical issues that arose before the system fix, employers are not obliged to process any AA88 notices issued on or before the 1st May 2023 that have not been acted upon. To determine whether action is required, employers are advised to check the issue date on the notices. If the issue date falls prior to 1 May 2023, and the payment due date has already passed, employers need not take further action as these notices have been automatically cancelled. Notifications confirming this cancellation will be sent to Employer e@syFile systems in due course, ensuring employers are informed of the status of these notices.
Scope of decisions and exclusions
The decisions regarding AA88 appointments and default notices apply to all cases delivered via the Employer e@syFile system and PERSAL. However, it is essential to note that the relief measures do not extend to third party appointments delivered through SARS eFiling.
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