South Africa: An Overview Of The Administrative Non-Compliance Penalties Under The Tax Administration Act 28 Of 2011

Last Updated: 3 September 2012
Article by Hanneke Farrand

Most Read Contributor in South Africa, September 2018

The Tax Administration Act 28 of 2011 ("TAA") although promulgated, will only come into operation on a date to be determined by the President by proclamation in the Government Gazette. The South African Revenue Service ("SARS") has indicated that this will be within the next three months. The TAA provides for two types of penalties to be imposed, namely administrative non-compliance penalties contained in Chapter 15 of the TAA, and understatement penalties contained in Chapter 16 of the TAA. The administrative non-compliance penalties will be discussed in further detail below.

There are two different types of administrative non-compliance penalties, namely; fixed amount penalties and percentage based penalties, both of which relate to the failure to comply with administrative requirements of a tax act. These penalties are very similar to the current administrative penalties for non-compliance imposed under section 75B of the Income Tax Act 58 of 1962 (the "Income Tax Act") and its Regulations. 

Fixed amount penalties in terms of the TAA

Section 210 of the TAA states that when SARS is satisfied that "non-compliance" by a person exists, SARS must impose the appropriate penalty in accordance with the table in section 211 of the TAA. "Non-compliance" is defined as a failure to comply with an obligation that is imposed by or under a tax act and is listed in a public notice issued by the Commissioner, other than the failure to pay tax subject to a percentage based penalty and non-compliance subject to an understatement penalty.

The fixed amount penalty imposed by the table in section 211 varies from R250 to R16 000 per month and depends on the amount of an assessed loss or taxable income for the preceding year.  The amount of the penalty will increase automatically by the same amount for each month that the person fails to remedy the non-compliance. According to the Explanatory Memorandum, fixed amount administrative penalties may only be imposed in respect of non-compliance listed in a public notice by the Commissioner, and not any non-compliance with an obligation under a tax act.

Percentage based penalties in the TAA

In terms of section 213 of the TAA, when SARS is satisfied that an amount of tax was not paid as and when required under a tax act, SARS must, in addition to any other penalty or interest for which a person may be liable under Chapter 15, impose a penalty equal to the percentage of the amount of unpaid tax as prescribed in the relevant tax act. The Explanatory Memorandum states that the procedures for the imposition and remittance of a percentage based penalty are regulated by the TAA, but the circumstances that trigger the imposition of the penalty remain in that tax act.

Comparison to penalties under the Income Tax Act

Section 75B of the Income Tax Act makes provision for an administrative penalty in respect of non-compliance with any procedural or administrative action or duty imposed or requested in terms of the Income Tax Act. The penalties system as set out in the section 75B Regulations came into effect on 1 January 2009 and provides for penalties for a range of non-compliance, which are determined according to the taxpayer's assessed loss or taxable income for the preceding year. The penalties range from R250 up to R16 000 a month. This is the same as the amounts of the administrative non-compliance penalties contained in the section 211 table of the TAA. The penalties system in the Regulations cover a range of non-compliance including the failure to register as a taxpayer, the failure to inform SARS of a change of address and other details, as well as the failure to submit a return, other documents and information. It also contains a catch all provision that includes any other non-compliance with an obligation imposed under the Income Tax Act.

The Regulations also provide for percentage-based penalties for non-compliance by employers, in respect of their employees' tax withholding obligation, and by provisional taxpayers in respect of the filing obligations imposed on them.


The TAA consolidates the common administrative provisions currently contained in a number of the tax acts. Where the TAA refers to "a tax act" it is therefore referring to, inter alia, the Income Tax Act, the Value-Added Tax Act 89 of 1991, the Transfer Duty Act 40 of 1949, and the Estate Duty Act 45 of 1955.

The percentage based penalties contained in the Income Tax Act are similar to those provided for in the TAA. The TAA however seems broader in scope in that it does not specifically list the non-compliances as currently set out in the section 75B Regulations. The TAA merely requires that "an amount of tax was not paid as and when required under a tax act".  Furthermore, the Regulations impose a 10 per cent penalty whereas the TAA imposes a penalty equal to "the percentage of the amount of unpaid tax as prescribed in the tax act". It seems as if this percentage will still have to be determined.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
KPMG, South Africa
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
KPMG, South Africa
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions