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HILTON TARRANT: We are joined by Piet Nel, the chairman of SAICA’s Northern Region Tax Committee. Piet, this month we’re talking about the new IRP6 forms – SARS’s new policies regarding provisional tax and of course that all-important due date, 31st August 2010 for that first provisional payment. Piet, in terms of this provisional tax process, what’s happening this year is obviously a lot different from previous years. What in fact has changed?

PIET NEL: Yes, that’s correct. The biggest change that would affect most people is that the forms are no longer being sent out to the individual provisional taxpayers. SARS has changed the system and they now require you to request a return from them, presumably assuming that the bulk of the provisional taxpayers either do it themselves or use the electronic system or use professionals. I think the biggest change is that the taxpayers will have to request a provisional tax return from SARS, and will no longer have to expect one through the mail. That is an important change.

HILTON TARRANT: Piet, any taxpayer is able to request that IRP6 return, as opposed to the kind of previous forms that were mailed out to prompt taxpayers. Is this because of the changes in who qualifies to pay provisional tax?

PIET NEL: That is important, and I’m glad you mentioned it. It’s an important change. In previous years if you had been a provisional taxpayer in the previous year they would send you one. Now the onus is actually on the taxpayer to identify whether he or she qualifies as a provisional taxpayer and then to ask for the return.  This is not prompted by the new rules, because they haven’t changed that much from previous years as to who are and who are not provisional taxpayers. But the onus is now on the taxpayer to go to SARS and say, listen, I am a provisional taxpayer, I was one last year, and I now require a provisional tax return.

HILTON TARRANT: Let’s maybe go back a few steps. In terms of actually qualifying as a provisional taxpayer, certain changes have been made recently that also affect that status. Who exactly qualifies as provisional taxpayers? When do you need to pay provisional tax as opposed to a normal tax return?

PIET NEL: Maybe we can deal with that. Provisional tax is just an advance payment of your normal tax liability, so it’s not a separate tax or a new taxpayer. Essentially it’s aimed at people who do not have employee’s tax deducted. That’s the main reason why it was introduced or why we have a provisional tax system. The law makes you a provisional taxpayer if you earn interest income in excess of the exempt amounts, and if you earn any other income other than income that is subject to employee’s tax.

HILTON TARRANT: Piet Nel is the chairman of SAICA’s Northern Region Tax Committee.

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