News You Can Use: What is an IT88?

TAX BITES – Understanding the IT88

Many South African taxpayers find themselves facing administrative penalties from the South African Revenue Service (SARS) due to failure to submit their personal income tax returns. When taxpayers ignore notices or demands regarding these penalties, SARS can take action under Section 179(1) of the Tax Administration Act, No.28 of 2011, to collect outstanding penalties or taxes owed.

One method SARS employs to collect these outstanding amounts is through an IT88. Similar to a garnishee order, an IT88 is a deduction order issued by SARS. It allows SARS to electronically collect outstanding penalties from the employer of a taxpayer who owes money for prior taxes.

Once an IT88 is issued, the employer is instructed to deduct a specified amount from the employee’s monthly salary and pay it directly to SARS to cover the outstanding debt. It’s important to note that this deduction is separate from the usual Pay-As-You-Earn (PAYE) deductions and is solely for the purpose of repaying the owed amount to SARS.

In essence, an IT88 serves as a mechanism for SARS to efficiently recover outstanding tax debts by directly involving the taxpayer’s employer in the collection process. Failure to comply with an IT88 can lead to further legal actions and financial consequences for the taxpayer. Therefore, it’s crucial for taxpayers to address any outstanding tax liabilities promptly to avoid such measures.

Please contact the PW Harvey & Co Tax Department should you have any queries regarding this at tax@pwharvey.co.za