The South African Revenue Service (SARS) is ramping up efforts to enforce the appointment of public officers for companies operating in South Africa. These changes are part of a broader initiative to ensure compliance and streamline the administration of tax affairs for businesses.
If your company hasn’t yet appointed a public officer, it’s time to act—or face potential penalties.
The role of a public officer
Under current tax laws, every company conducting business in South Africa is required to appoint a public officer within 30 days of its establishment. This public officer serves as the primary point of contact between the company and SARS, handling all tax-related matters and ensuring the company meets its obligations under South African tax laws.
The public officer must be a senior official residing in South Africa, or, if no such official is available, another suitable person appointed by the company or an authorized agent. Failure to appoint a public officer not only complicates the company’s ability to manage tax affairs, such as VAT registrations and filings, but also exposes the company to administrative penalties.
Proposed changes: What’s new?
In response to ongoing challenges—particularly for foreign companies operating in South Africa—SARS is proposing amendments to section 246 of the Tax Administration Act, 28 of 2011. These changes, outlined in the 2024 Draft Tax Administration Laws Amendment Bill, aim to close loopholes that some companies have exploited to avoid appointing a public officer.
Key proposed changes include:
Immediate appointment
Companies will no longer have a 30-day window to appoint a public officer. Instead, the public officer must be appointed at the same time the company is formed, like how income tax numbers are allocated.
Hierarchy of appointment
If a company fails to appoint a public officer, SARS will automatically designate a suitable individual from a defined hierarchy, starting with the Managing Director or equivalent, followed by the Financial Director, Company Secretary, and other senior officials in descending order.
SARS designation
In cases where none of the individuals meet the criteria to serve as a public officer, SARS reserves the right to appoint any suitable person they designate for the role.
Replacement obligations
If an appointed public officer is deemed no longer suitable or eligible, SARS can withdraw its approval. The company must then appoint a replacement within 21 business days of receiving notice from SARS.
Why this matters
Failure to comply with these regulations can result in significant administrative burdens and penalties for companies. Without a designated public officer, crucial tax processes like registrations, amendments, and filings cannot be completed, leading to potential delays and fines.
For foreign companies, the challenge is even greater, as the requirements for public officers can be difficult to meet when senior officials are not based in South Africa. The proposed changes aim to address these challenges by streamlining the appointment process and reducing the room for non-compliance.
How MMS Group can assist
Navigating these changes can be complex, but MMS Group is here to help. Our team of experts is well-versed in the latest tax regulations and can guide you through the process of appointing or replacing a public officer. We ensure that your company remains compliant with SARS requirements, avoiding unnecessary complications and penalties.
If your company has not yet appointed a public officer, or if you’re unsure whether your current appointment meets SARS’ standards, contact MMS Group today to ensure your business is fully compliant and prepared for these upcoming changes.
Take action now
With SARS intensifying its focus on public officer appointments, it’s crucial to stay ahead of the curve. Don’t wait until it’s too late—reach out to MMS Group for expert advice and support in navigating these new requirements.