What happens if I don't pay provisional tax on time?

**SARS will immediately impose a 10% penalty plus interest at 11.25% per annum** if you don't pay your provisional tax by the due dates (31 August and the last working day of February). ## Immediate Consequences **10% penalty** is applied to the outstanding provisional tax amount for each late payment period. This penalty applies separately to both the first payment (August) and second payment (February) if either is paid late. **Interest at 11.25% per annum** compounds daily from the due date until full payment. As of March 2025, SARS charges 11.25% annual interest on all late tax payments, calculated from the original due date. ## How Penalties Are Calculated The penalty and interest apply to the **actual provisional tax liability**, not your estimated payment. If your final assessment shows you owed more than you paid, penalties apply to the full shortfall. **Example:** If you owed R50,000 in provisional tax but paid nothing by 28 February: - **10% penalty:** R5,000 - **Interest:** R5,625 per year (compounds daily) - **Total after 12 months:** R60,625 ## Additional Risks **Cash flow impact** from compounding interest can quickly escalate small amounts into substantial debts. SARS may also initiate **collection procedures**, including: - Garnishing bank accounts - Attaching assets - Issuing civil judgements **Poor tax compliance history** affects your risk profile with SARS, potentially triggering more frequent audits and scrutiny of future returns. ## How to Avoid Late Payment Penalties **Pay by the deadlines:** 31 August (first payment) and the last working day of February (second payment). **Use SARS eFiling** for accurate calculation and electronic payment confirmation. Manual calculations often result in underpayments. **Set up payment reminders** at least one week before due dates to allow for banking delays. **Consider using practice management software** like WeekdayApp, which automatically tracks all SARS compliance deadlines and sends advance reminders, helping accounting professionals avoid costly penalties from R199/user/month. ## If You've Already Missed the Deadline Pay immediately to stop interest accumulating. Contact SARS if you believe the penalty was incorrectly applied - you have **30 business days** to object to assessments. For genuine hardship cases, SARS may consider remission of penalties, but this requires formal application with supporting documentation.