Some people qualify as provisional taxpayers, but a lot don’t know what that means or what provisional tax is. So, in this article I will try to clear up some of the smoke surrounding this often-misunderstood and feared tax.
Firstly, provisional tax is not a separate type of tax, such as VAT or the road tax you pay through your very expensive fuel bill. Provisional tax is merely a method that SARS uses to collect income tax, whether it be company tax or personal income tax. For individuals it uses the same tables and rates as you would be taxed on if you were a straight forward employee and counts towards the same tax bill as an employee pays through the PAYE that is shown on their payslip. The big difference is when and how this tax is calculated and paid to SARS. Employees pay their tax every month, provisional payers pay it twice a year before the 31st August and 28th February. For companies it uses the straight forward 28% tax rate or the small business tax tables.
Author: Brandon Allen
I'm a business Accountant in practice. Nothing fancy about me, but occasionally I have a flash of inspiration you might find useful. My blood is also 50% coffee.
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