Proactive Provision

by Amanda Roothman on 3 February 2023


I like to encourage people to realise that any action is a good action if it's proactive and there is positive intent behind it. 

Let's be proactive about Provisional Tax. 

Towards the end of 2021, SARS had gone the route of automatically de-selecting some individuals for provisional tax filing after the 2021 tax assessments were finalised, using this data to decide whether someone was meant to be a provisional taxpayer or not. This caused a dramatic amount of backdated administration penalties being levied without notice to us taxpayers. 

So let us revisit the facts of the matter around who is considered to be a Provisional Taxpayer so that we can be proactive and plan properly to ensure your compliance with SARS.

Any person who receives income other than remuneration, is a provisional taxpayer.

Most salary earners are therefore not provisional taxpayers if they have no other sources of income. Even when receiving exempt income, such as interest in the following brackets, does not make you a provisional taxpayer: 

  • If you receive interest of less than R 23 800 per annum and you are under the age of 65;
  • If you receive interest of less than R 34 500 per annum and you are over the age of 65;
  • If you receive exempt amonts from a tax free savings account.

A Provisional Taxpayer is defined (Paragraph 1 of the Fourth Schedule of the Income Tax Act No 58 of 1962) as any - 

  • 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; 
  • A Company; 
  • A person who is told by the Commissioner that he or she is a provisional taxpayer.

Excluded from being a provisional taxpayer are any

  • Approved public benefit organisations or recreational clubs that have been approved by the Commissioner (in terms of s30 or s30A);
  • Body Corporates, share block companies or certain associations of personas that are exempt from tax; 
  • Non-resident owner or charterer of ships or aircraft; 
  • Any natural person who does not earn any income from carrying on any business - provided that the person's taxable income will not be more than the tax threshold: For the 2023 tax year:
    • For taxpayers below age 65 - R 91 250; 
    • For taxpayers over 65 but below 75 - R 141 250 and
    • For taxpayers over 75 - R 157 900; or
    • The taxable income of that person (earned from interest, foreign dividends, rental from letting of fixed property and remuneration from unregistered employers) - will be below R 30 000.
  • a Small business funding entity; 
  • a Deceased Estate.

When is Provisional Tax due and payable to SARS? 

  • The first provisional tax payment (P1) must be made within 6 months of the start of the year of assessment. 
    For years of assessment starting March, this will be August 31st, if it is a business day, or the last business day before this date. 

  • The second provisional tax payment (P2) must be made by no later than the last business day of the year of assessment. 
    For years of assessment starting March, this will be the last business day in February.

  • The third payment is voluntary (P3) and may be made
    • for companies with a February year end, and any other person other than a company, on the last business day of September; 
    • in any other case, within 6 months of the year of assessment. 

Proactive #TeamExponentialBrilliance focus their effort on things they can do something about. The nature of their energy is positive. And Proactive people carry their own weather with them. 

Contact us, and it's gonna be a bright, bright, sunshiny day! 

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