SARS has suddenly raised penalties and interest on our sdl account without providing evidence. We use sage vip payroll system and the systems were audited this morning and confirmation was received that the monthly declaration and payment was 1005 correct
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
It is in terms of section 12 of the Skills Development Levies Act, 1999 that penalties on default is imposed.
SARS must impose a penalty of 10 per cent if any levy remains unpaid after the last day for payment thereof. It is done under Chapter 15 of the Tax Administration Act.
SARS or the executive officer of the SETA or approved body, as the case may be, may remit the penalty or any portion thereof imposed by section 12(1) in accordance with the provisions of Chapter 15 of the Tax Administration Act.
You indicate that the amounts were not paid late and it may have been appropriate to request SARS for reasons for them raising the penalty. Section 219 allows for SARS to issue an altered assessment if satisfied that the penalty was not assessed in accordance with this chapter. Your letter to SARS may well have been a request to SARS to act in terms of section 219.
We suggest that you consider lodging a complaint with the office of the Tax Ombud.