A letter of final demand was received by our client. It is with regards to Admin Penalties and Non-Submission Penalties. It said there were three options that could be pursued within 10 days of the letter. I lodged 4 Request for Remission as the returns h
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
We are not if this is a letter issued under section 172(1) (of the Tax Administration Act):
If a person has an outstanding tax debt, SARS may, after giving the person at least 10 business days’ notice, file with the clerk or registrar of a competent court a certified statement setting out the amount of tax payable and certified by SARS as correct.
It may also, more likely, that SARS wants to appoint a third party, under section 179(1):
A senior SARS official may authorise the issue of a notice to a person who holds or owes or will hold or owe any money, including a pension, salary, wage or other remuneration, for or to a taxpayer, requiring the person to pay the money to SARS in satisfaction of the taxpayer’s outstanding tax debt.
Under section 179(5), SARS may only issue the notice referred to in subsection (1) after delivery to the tax debtor of a final demand for payment which must be delivered at the latest 10 business days before the issue of the notice, which demand must set out the recovery steps that SARS may take if the tax debt is not paid and the available debt relief mechanisms under this Act, including, in respect of recovery steps that may be taken under this section—
(b) if the tax debtor is not a natural person, that the tax debtor may within five business days of receiving the demand apply to SARS for a reduction of the amount to be paid to SARS under subsection (1), based on serious financial hardship.
You must remember that, with respect to the 'remittance request’, a “person who is aggrieved by a 'penalty assessment’ notice may, on or before the date for payment in the 'penalty assessment', in the prescribed form and manner, request SARS to remit the 'penalty' in accordance with Part E.”
The ‘remittance request’, on its own, doesn’t suspend the obligation to make payment. A request to suspend payment should have been made.
We are aware that, under section 215(3), during the period commencing on the day that SARS receives the 'remittance request', and ending 21 business days after notice has been given of SARS' decision, no collection steps relating to the 'penalty' amount may be taken unless SARS has a reasonable belief that there … It may well be that it is SARS’s view that the remittance request is not valid.