IT 88 - DO NOT ignore this document from SARS

The ITA88  system  from SARS is here.

What is the ITA 88 system

With effect from the 1 September 2010 SARS will appoint employers as collection agents for Administrative penalties and unpaid taxes.  You as the employer will be obliged to deduct the full amount from the employee’s salary and pay this over to the receiver with your next EMP 201 submission.

1. Penalties will be levied on the following offences:
   1. Not registering as a tax payer
   2. Not informing SARS of a change of address or other important details – employer as well
   3. Not submitting a return or related documents
   4. Not submitting a monthly return – employer
   5. Not providing details of an employee – employer
   6. Delivery of tax certificates before reconciling and returning to SARS – employer
   7. Any other non-compliance with an obligation according to SARS

1. Basic information
2. Penalties are from R250 – R16000 depending on the assessment by SARS.
3. The employee would have received an ITP34 penalty assessment stating the offence, penalty, payment due date and payment procedure
4. This penalty can be disputed by remedying the problem and completing a Request for Remission form (RFR)
5. Penalties will be raised EVERY month until it’s sorted – consultation with employee is essential!
6. SARS rule – pay now, argue later

1. The following is the procedure  that will have to be followed:
2. Employee fails to respond to ITP34 notice
3. SARS appoints the employer as agent (section 99 of the income tax act) and issues the ITA88 form to the employer to appoint him as agent (These notices will be issued electronically and via email – to be administered through Easyfile) – the employer is legally bound to obey and deduct the money
4. Employer administers the deduction from the payroll. This can be done over 3 months depending on employee’s affordability and the money will be paid over to SARS with your next EMP 201 submission
5. No interest applies if there is a payment plan(3 months) for the ITA88 penalty
6. Legal priority of deductions should there be limited funds then the employer must first deduct:
   • PAYE
   • UIF
   • Pension or provident Fund
   • Medical aid deductions

Special provisions for Garnishee/maintenance payments.

• Existing garnishees must “stand back” for ITA88 deductions – The collecting agents/attorneys must be informed in writing.

Finally it is in the interest of the employer to help the employee resolve these outstanding issues. If the employer does not comply then SARS will hold the employer liable for the outstanding amounts.