Listed below are the tax thresholds for 2022 – and who doesn’t must pay: SARS

The South African Income Service (SARS) has printed its annual information for the earnings tax season, detailing who is predicted to pay earnings tax in South Africa and the various kinds of earnings which will probably be taxed.

Taxpayers will have the ability to file their tax returns from 1 July 2022. People who obtain taxable earnings in extra of a certain amount, often called the ‘tax threshold’ quantity, in a 12 months of evaluation are accountable for earnings tax.

The tax threshold for the 2023 12 months of evaluation is:

  • R91,250 in case you are youthful than 65 years.
  • In case you are 65 years of age to beneath 75 years, the tax threshold (i.e. the quantity above which earnings tax turns into payable) is R141,250.
  • For taxpayers aged 75 years and older, this threshold is R157,900.

In the event you earn beneath these thresholds, you aren’t liable to pay tax.

To find out whether or not or not your earnings falls beneath or above these thresholds, SARS offered a breakdown of a few of the totally different sorts of earnings that a person may be taxed on, together with:

  1. Earnings from employment equivalent to salaries, wages, bonuses, time beyond regulation, taxable advantages (fringe advantages) and allowances;
  2. Severance advantages and sure lump-sum advantages;
  3. Earnings from a enterprise or commerce;
  4. Earnings or earnings arising from a person being a beneficiary of a belief;
  5. Charges from firms or shut firms for companies rendered;
  6. Funding earnings equivalent to curiosity, international dividends and dividends from a Actual Property Funding Belief (REIT);
  7. Rental earnings;
  8. Earnings from royalties;
  9. Annuities;
  10. Pensions; and
  11. Sure capital good points.

Penalties 

From a taxpayer perspective, the significance of submitting tax returns, particularly inside stipulated deadlines, is supported by the sanctions SARS can impose to the extent that these obligations should not complied with, says Tsanga Mukumba, an affiliate at Cliffe Dekker Hofmeyr.

The place taxpayers fail to submit returns by the related deadline, the South African Income Service (SARS) is beneath sure circumstances, empowered to situation an evaluation of the quantity of tax due and impose sure penalties, he stated.

“For instance, if a taxpayer fails to submit a return, part 95 of the Tax Administration Act empowers SARS to situation an evaluation based mostly on an estimate, utilizing info available to SARS. Such an estimated evaluation can solely be challenged as soon as the taxpayer has duly submitted the excellent return,” he stated.

“Along with having the ability to situation an evaluation which is able to consequence within the taxpayer being accountable for quantities of tax, SARS might levy administrative non-compliance penalties beneath part 210 of the Tax Administration Act and understatement penalties beneath part 222 of the Tax Administration Act.”

Mukumba famous that SARS might impose an administrative non-compliance penalty when a taxpayer has did not adjust to their obligation to submit a return. These penalties are imposed for each month throughout which the non-compliance persists.

He added that the quantity of the penalty relies on the taxpayer’s assessed loss or taxable earnings for the previous tax 12 months.

“The place a taxpayer has an assessed loss, every month-to-month administrative non-compliance penalty could also be R250, whereas the place a taxpayer has taxable earnings of R50,000,001 or extra, the penalty could also be R16,000 per 30 days.

“SARS is equally empowered to impose an understatement penalty, the place the non-submission of a return has prejudiced SARS or the fiscus and resulted in a shortfall.”


Learn: SARS is altering auto-assessments for taxpayers – what it is best to know

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