An ITA88 has been issued to the employer of a taxpayer to deduct an amount of R6700 from his salary per month. The taxpayer owes SARS an amount of R53000. The taxpayer's basic salary is R12500 per month and after deductions and the R6700 there is barely e
Author: Cecile Bothe
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
Please refer to the following extract from the employers guide to the AA88 third party appointment process published on the SARS website:
4.2 Employees can’t afford the amount on the AA88 notice issued.
a) Most of AA88 transactions will be issued for the full debt amount in a single deduction. If the employer identifies that the employee won’t be able to afford the full deduction, the employer can submit an “Affordability Requested” outcome for the employee on e@syFile.
EXTERNAL GUIDE AN EMPLOYERS GUIDE TO THE THIRD PARTY APPOINTMENT PROCESS EMP-ELEC-02-G03 REVISION: 3 Page 9 of 11
b) Upon receipt of the request, SARS will calculate Affordability Terms based on the employee’s income related information.
i) If the affordability terms provided by SARS are in the employee’s view still not affordable, the employee is required to visit a SARS branch to make necessary arrangements and substantiate what is affordable in order to allow for the employee to pay for basic living expenses.
c) When the employee decides to apply for more lenient affordability terms at a SARS branch he/she will be required as a prerequisite to:
i) Submit any outstanding income tax returns.
ii) Supply the last three month’s payslips and proof of expenses.
d) If more lenient terms are agreed to between the employee and SARS, the AA88 information will be updated on your e@syFile Application during synchronisation.
i) This agreement is subject to SARS approval.
ii) Employers won’t be able to apply for affordability where the employee has an Active Assessed Tax AA88 transaction. · These employees must visit a SARS branch if affordability terms are required. iii) Based on the employee’s income related information, SARS might not issue instalment terms that are different from the original transaction