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Penalty Remission Under the TAA: When Personal Circumstances Fall Short

This article is based on tax law for the year ending 29 February 2026.

Question: 

SARS declined a taxpayer’s request for the remission of administrative penalties, citing that the incident was not a first occurrence, the penalty amount exceeded R2 000, and the reasons provided did not meet the "exceptional circumstances" threshold as outlined in sections 217(3) and 218 of the Tax Administration Act 28 of 2011. A doctor’s note was submitted as supporting evidence, indicating that the delay in compliance was due to the director’s child being ill.

Answer:

The Problem / Facts

SARS declined a taxpayer’s request for the remission of administrative penalties, citing that the incident was not a first occurrence, the penalty amount exceeded R2 000, and the reasons provided did not meet the "exceptional circumstances" threshold as outlined in sections 217(3) and 218 of the Tax Administration Act 28 of 2011. A doctor’s note was submitted as supporting evidence, indicating that the delay in compliance was due to the director’s child being ill.

Analysis of the Tax Issues Identified

The central issue is the interpretation of "exceptional circumstances" in the context of illness under the Tax Administration Act (TAA). SARS rejected the remission request based on the criteria in sections 217(3) and 218, asserting that although the situation was supported by a medical certificate, it did not qualify as exceptional. The key consideration is whether the illness was sufficiently serious to directly prevent the taxpayer’s compliance, as per SARS’s interpretation of "exceptional circumstances".

List of Tax Issues and Relevant Legislative Provisions
  • Remission of Administrative Penalties: Tax Administration Act 28 of 2011, sections 217(3) and 218.

Applicable Law
  • Section 217(3) of the Tax Administration Act: Provides for the remission of penalties where exceptional circumstances exist and certain criteria are met (such as a first-time offence or where the penalty amount is nominal).

  • Section 218 of the Tax Administration Act: Defines "exceptional circumstances" to include serious illness, natural disasters, or other unforeseeable events beyond the taxpayer’s control.

Application of the Law to the Facts

In applying sections 217(3) and 218 of the TAA, SARS concluded that the taxpayer’s situation did not constitute exceptional circumstances. Although a doctor’s note was provided to explain the delay due to the director’s child being ill, SARS likely found that the illness did not meet the criteria for "serious illness" nor did it sufficiently impair the taxpayer’s ability to comply. Furthermore, as this was not a first occurrence and the penalty amount exceeded R2 000, the requirements of section 217(3) were not satisfied.

SARS’s internal guidelines generally require that personal circumstances must be severe and directly responsible for the non-compliance to be considered exceptional. In this case, those standards appear not to have been met. Taxpayers in similar situations should provide more comprehensive evidence demonstrating the seriousness, duration, and direct impact of the circumstances on their ability to comply.

Practical Considerations and Next Steps

It remains possible to lodge an objection to SARS’s decision and submit a strengthened motivation. For example, if the relevant return was due on 23 October 2024 and only submitted in April 2025, a detailed account of how the illness incapacitated the responsible party during the entire period would be necessary. Penalties may be imposed under various provisions of the TAA, and it is crucial to assess SARS’s discretion to remit penalties in the absence of exceptional circumstances. This analysis will assist in formulating a more persuasive objection or alternative resolution

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