Important tax deadline this week – what you need to know
By Tuesday, 28 February 2023, provisional taxpayers are required to submit their second tax return (IRP6).
The South African Revenue Service (SARS) has said that the IRP6 for this year covers the 2023 tax year, which runs from 1 March 2022 to 28 February 2023.
SARS said that provisional tax is not separate from income tax but is a method of liability in advance to avoid a large tax debt on assessment when it comes to paying income tax.
“You are required to estimate your taxable income for the tax year and spread your provisional tax liability over the tax year in at least two payments,” SARS said.
“A third top-up payment may apply if the first two payments were inadequate to cover the tax liability payable for the tax year. Your first provisional tax return is due on the last business day of August, and the second is due on the last business day of February,” it added.
According to the taxman, your provisional taxpayer status changes as your income changes. A provisional taxpayer has specific tax obligations that, if not met, may attract penalties.
Who qualifies for provisional tax?
Any person who receives income (or to whom income accrues) other than remuneration is a provisional taxpayer, said the tax authority.
As a result, most salary earners are not-provisional taxpayers if they have no other sources of income.
SARS said: “It is important to note that receiving exempt income, as follows, does not make you a provisional taxpayer:.”
- If you receive interest of less than R23,800, if you are under 65; or
- If you receive interest of less than R34,500 if you are 65 and older or;
- You receive an exempt amount from a tax-free savings account.
A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act as any:
- A natural person who derives income other than remuneration or an allowance or advance as mentioned in section 8(1) or who derives remuneration from an employer who is not registered for employees’ tax (for example, an embassy is not obligated to register as an employer for employees’ tax purposes)
- A person who is told by the Commissioner that he or she is a provisional taxpayer.
The revenue service noted that you are not classified as a provisional taxpayer if you do not make money from running a business, and your taxable income is below the tax threshold.
The tax threshold for the 2023 tax year is R91,250 for taxpayers under 65 years, R141,250 for taxpayers between 65 and 75 years, and R157,900 for taxpayers aged 75 and above.
Read: SARS is not slowing down – despite red flags over South Africa’s shrinking tax base