If you recently took up a side hustle to make ends meet – well, the South African Revenue Service (SARS) has declared that it wants a bite of that apple too.
In South Africa, resident taxpayers who earn an extra income beyond their main hustle salary are legally required to report all their income sources to SARS.
According to Tax Consulting SA, failing to do so can lead to severe consequences, including criminal charges.
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Why full disclosure matters
Tax Consulting SA emphasizes that every South African resident taxpayer must declare all income, whether primary or secondary, to SARS.
Being transparent about all income helps taxpayers follow the law and contribute fairly to the country’s budget. Not disclosing extra income breaks the law and can lead to serious penalties and criminal charges.
South Africa’s commitment to financial integrity
The problem of not reporting all income has become more important as South Africa works to meet international standards set by the Financial Action Task Force (FATF).
This is part of the country’s efforts to improve its measures against money laundering and terrorism financing.
Act promptly to avoid penalties
Tax Consulting SA advises taxpayers to address their tax obligations as soon as they can. It warns that not doing so, will only increases the risk of severe penalties, including criminal charges.
Taking proactive measures can significantly reduce exposure to these risks, and there is always relief available for those who take steps to correct their tax affairs.
Voluntary compliance is essential
For those who have not disclosed all their income in the past, the Voluntary Disclosure Programme (VDP) offers a way to set things right.
The VDP allows taxpayers to correct their tax matters voluntarily before SARS initiates any action.
This program is especially important for those who have previously submitted their tax returns but have undisclosed income that SARS has not yet detected.
Benefits of the Voluntary Disclosure Programme
The VDP is only available to taxpayers who SARS is unaware of the tax default.
It offers an opportunity to regularize tax affairs with reduced penalties and without the risk of criminal prosecution, provided the disclosure is made before SARS begins an investigation.
Failing to use the VDP can lead to severe consequences, including criminal prosecution.
