SARS administrative penalties may be imposed at a fixed-amount for qualifying non-compliance, commonly an outstanding return. The penalty can recur for each month that the non-compliance continues. Filing the missing return is usually the first priority, but the taxpayer must also review the penalty assessment, statement of account and any available remission or objection process.

Why the penalty keeps growing

A recurring penalty is designed to continue while the identified non-compliance remains unresolved. Paying one month’s amount does not necessarily stop later months if the return or other obligation is still outstanding.

For the current official requirements, refer to SARS’s administrative-penalty guidance and SARS’s dispute guidance.

The notice of assessment should identify the tax type, period and reason.

How the amount is determined

For the general fixed-amount table, SARS lists monthly amounts ranging from R250 to R16,000, depending on the taxpayer’s assessed loss or taxable income in the preceding year.

The exact assessment must be read carefully because different penalty regimes may apply to different obligations.

Step one: identify the real non-compliance

• Download the penalty assessment and statement of account
• List every outstanding return or submission
• Check whether the taxpayer was required to file for that period
• Confirm whether a return was filed under another profile or reference
• Resolve eFiling access or registered representative issues
• Gather proof where the taxpayer believes the obligation was already met

Step two: remedy the default

Submit the outstanding return or complete the missing obligation as soon as reliable information is available. An unsupported nil return can create a new problem, especially where the taxpayer traded.

After submission, confirm that SARS processed the return and that the non-compliance indicator has changed.

Step three: consider remission or dispute

A request for remission may be available within the applicable rules and periods. The taxpayer should provide a truthful explanation and supporting evidence rather than a generic statement.

If the remission outcome is unfavourable, further dispute rights may exist. Time limits are important.

Payment and suspension considerations

A dispute does not automatically make collection activity disappear. Review whether payment is due, whether a payment arrangement or suspension request is appropriate and what SARS correspondence requires.

Professional advice is important where the debt is material or enforcement has begun.

Common mistakes

• Ignoring the notice because no email was received
• Paying penalties without filing the missing return
• Submitting estimated returns that do not match records
• Missing dispute deadlines
• Assuming CIPC deregistration cancelled SARS obligations
• Using an old tax practitioner profile without formal access
• Failing to save submission and remission proof

Example: SARS Administrative penalties after a company stopped trading

A company ceased operations but remained registered at SARS and CIPC. Directors ignored ITR14 notices because the bank account was closed. Administrative penalties continued because the return obligation was never formally resolved. The company must submit the relevant outstanding returns and then address deregistration or future status through the proper channels.

Evidence for a remission request

Useful evidence can include medical or disaster records, proof of system failure, correspondence, submission attempts and documents showing when the default was remedied. The explanation should connect the evidence to the specific period and reason.

Related LMW guidance covers VAT registration, provisional tax and IRP6 returns, and ITR14 company income-tax returns.

How LMW Financial Solutions can assist

LMW can review the penalty notices, identify outstanding returns, assist with compliance clean-up and prepare a remission or response pack where the matter falls within scope. Complex disputes or litigation may require a tax attorney.

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Frequently Asked Questions

How much can a SARS administrative penalty be?

The general fixed-amount table ranges from R250 to R16,000 per month, depending on the applicable taxable-income or assessed-loss band.

Will paying the penalty stop it from recurring?

Not necessarily. The underlying non-compliance normally needs to be remedied.

Can a penalty be remitted?

A request for remission may be available if the taxpayer meets the rules and provides a proper explanation and evidence.

Does a dormant company avoid penalties?

Not automatically. A company may still have filing obligations while registered for the tax type.