Penalties & remission · Guide 5 of 8
SARS penalties: which ones can be removed, and how.
A surprising share of SARS balances we review are not tax at all. They are penalties stacked on top of a small original amount, quietly compounding for years. Knowing which penalty you are facing determines whether you pay it or get it remitted.
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The four penalty types you are most likely to meet
- Late payment penalty: automatically applied when an amount is paid after the due date, plus interest until settled.
- Administrative penalties for non-submission: recurring monthly penalties for outstanding personal income tax returns, scaled by your income bracket (from R250 up to R16,000 per month). These are the silent account killers.
- Underestimation penalties: provisional taxpayers whose second-period estimates fall short of the prescribed ratio pay a penalty on the shortfall.
- Understatement penalties: applied where a "substantial understatement" of tax is found, calculated as a percentage of the shortfall, with percentages escalating based on behaviour (from innocent oversight to intentional).
Which penalties qualify for remission?
Fixed administrative penalties (non-submission) can be remitted where reasonable grounds exist: serious illness or bereavement of the taxpayer or a close family member, natural or human-made disaster, serious financial hardship, reliance on incorrect professional advice, SARS processing delays, or the return genuinely not being required. The grounds must be evidenced, not asserted.
Recurring administrative penalties require more: the underlying non-compliance must be fixed first. In practice that means all outstanding returns filed before remission is even entertained. This is why "just ask them to remove it" fails; sequence matters.
Late payment and understatement penalties follow different routes (suspension of payment pending dispute, or remission requests on defined grounds) and deserve professional handling because the documentation window is short.
How the request process works
- Establish exactly which penalties exist, for which periods, and why.
- Bring the underlying filings current.
- Submit the remission request with a written motivation mapped to the recognised grounds, with supporting evidence attached.
- If declined, escalate through the formal dispute routes rather than restarting the same request.
What usually sinks these requests
Vague motivations ("I forgot"), gaps in evidence, partial filing histories, and repeated reliance on the same ground year after year. A well-built file turns a sympathetic case into an approvable one; a thin one burns the attempt.
Important
This guide is general information, not tax advice. Penalty rules, grounds and procedures depend on your specific facts and current legislation. Regulated submissions, disputes and remission requests are handled through registered partners where required.