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How does "Interest on underpayment of prov tax" work?

Posted 8 September 2015 under Tax Questions



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Taxnoob says:
8 September 2015 at 17:39

I've done my 2012 tax return only now and I see the original assessment is R14,693.15. Now another item that is listed is:

Interest on underpayment of prov tax. Section 89quat(2) 2012 to the amount of R3,884.46.

I just want to know is that value correct, and how is that calculated. I guess it is that "high" because of this part in that section?:

"... Such interest being calculated from the effective date in relation to the said year until the date of assessment of such normal tax. "

I was just curious about how exactly SARS calculates the interest and what the "prescribed rate" entails. Thanks in advance.

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TaxTimTaxTim says:
8 September 2015 at 20:23

The amount of interest and penalties is not set in stone. It would be best to run a Statement of Account from 2012 to the present to see what interest and penalties SARS has levied each year to arrive at the amount of R3,884.46. You could then follow this up with a visit to SARS or a call to their helpdesk on 0800 007 277 to understand the breakdown further.


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