Following on from our previous tax alert entitled “The End of the Road for the Cheque”, it appears that SARS has taken further steps to ensure taxpayers discontinue the use of cheques for the purposes of settling their tax debts.
With effect from 30 May 2014, taxpayers are no longer permitted to make any cheque payments to SARS in the following circumstances:
- During the preceding 3 years the taxpayer made two payments by cheque to SARS that were “referred to drawer”; or
- The payment is in excess of R50 000 with regards to:
- Income Tax except for the following:
- Donations Tax
- Withholding tax in respect of non-resident sellers of immovable property located in South Africa
- Assessments of owners or charters of ships or aircrafts who are not resident in South Africa
- Value-Added Tax (VAT)
- Employees Tax (PAYE)
- Income Tax except for the following:
It is important to note that the R50 000 limit noted above relates to the total payments made by cheque by that person on that specific day. Therefore if, for example, a person is required to make an Income Tax and VAT payment on the same day the total of both cheques cannot exceed this R50 000 threshold.
We recommend that the payment of taxes by cheque be used as a last resort as non-adherence to the above requirements will result in cheques being rejected and late payment penalties and interest being imposed.