POLOKWANE – Tax evasion applies to both the illegal nonpayment as well as the illegal underpayment of taxes.
Even if a taxpayer fails to submit the appropriate tax forms, the Internal Revenue Service Criminal Investigation Division can still determine if taxes were owed based on the information required to be sent in by third parties or simple disregard.
Generally, someone is not considered to be guilty of tax evasion unless the failure to pay is deemed intentional.
This is according to Julia Kagan, a personal finance senior journalist. If charged by police and found guilty by the Specialised Commercial Crimes Court, one will carry a maximum prison sentence of up to five years.
This negatively affects the generation of revenue for the government and may, in the long run affect budgets meant to pay for the provision of services, she said.
Below are efficient ways to remain tax compliant:
1. Maintain organised records of your income, expenses, and relevant financial transactions.
2. Familiarise yourself with the deductions and exemptions available in South Africa like medical expenses, retirement annuity contributions, and interest on certain types of loans.
3.Contributions to retirement annuities and pension funds are tax-deductible in South Africa. Consider maximizing your contributions to these funds to reduce your taxable income and secure your financial future.
4. Leverage tax-free savings accounts as they offer a tax-efficient way to save and invest in South Africa.
5. Consider enlisting the services of a qualified tax professional or tax accountant to provide personalised advice.
