Key Benefits:
78. Commissioner General to make assessment
(1) Where a person is required to furnish a tax return in terms of sections 65(1) and 67, the Commissioner General shall proceed to assess the person chargeable with tax as expeditiously as possible after the time allowed for such person or as extended under section 77.
(2) Where a person is required to furnish a tax return in terms of section 65(2), the person shall estimate the tax payable for the current tax year for the purpose of making the quarterly payments as provided for under section 95(2) for that tax year.
(2A) Where a person, other than a company, has the option to furnish a tax return in terms of section 65(2), the person may estimate the tax payable for the current tax year for the purpose of making a lump sum payment of tax for that tax year as provided in section 95(5).
(3) Subject to subsection (4), the return furnished in terms of section 65(2) shall be the assessment of taxable income or assessed loss, and the tax payable on the basis of the return shall be the assessed tax of that person for the tax year.
(4) Where a person has delivered a tax return in terms of section 65(1), the Commissioner General may accept such return and make an assessment in accordance therewith.
(5) Where a person has delivered a tax return in terms of section 65(2) the Commissioner General may accept such return and the assessment made by the person of that person's taxable income or assessed loss and the tax payable in terms of subsection(6), if the tax thereon is duly paid in full in terms of the provisions of section 95.
(6) Where-
(a) a person fails to furnish a tax return; or
(b) the Commissioner General is not satisfied that the tax return furnished by any person is true and correct;
(c) a person fails to pay the tax for any tax year under section 95(2) and (3) in full, within the specified period.
the Commissioner General may make an assessment to the best of his or her judgement.
(7) Notwithstanding the provisions of subsection (6), where the Commissioner General is of the opinion that a person in any of the circumstances specified in section 67 is chargeable to tax for any tax year, he or she may at any time assess such person without first requiring him or her to furnish a tax return under any of the provisions of this Act.
(8) When a person fails to furnish a tax return for any tax year, the Commissioner General shall serve on such person a notice in writing requesting him or her to furnish the tax return within such time as may be specified in the notice.
(9) If after the expiration of the time specified in the notice referred to in subsection (8) the person on whom the notice was served fails to furnish the tax return, the Commissioner General shall, where a penalty has been imposed under section 117(2), make an assessment on him or her in respect of the penalty.
(10) The provisions of section 88 shall not apply to an assessment made on any person under subsection (9), except where the person so assessed objects that he or she is not liable to furnish a tax return.
Where, in relation to an assessment made on any person for any tax year, the Commissioner General is of the opinion that-
(a) the tax charged is less than the amount which should have been charged;
(b) any assessed loss is greater than the amount at which it should have been assessed; or
(c) a refund has been made in excess of the amount which should have been refunded,
the Commissioner General shall make an additional assessment accordingly.
(1) Where, in relation to an assessment made on any person for any tax year, the Commissioner General is satisfied that-
(a) the tax charged is greater than the amount which should have been charged;
(b) any assessed loss is less than the amount at which it should have been assessed; or
(c) a refund has been made which is less than the amount which should have been refunded,
by reason of some error, mistake or omission in the assessment, the Commissioner General may, within four years of the date of the notice of the assessment, make a reduced assessment accordingly.
(2) Where, on the determination of an appeal made under Part XII, the High Court or the Board of Adjudicators orders the reduction of an assessment, the Commissioner General shall reduce the assessment accordingly.
(3) Where, for any tax year, a person who has furnished a tax return for that tax year and has been assessed under section 78 or section 79, notifies the Commissioner General in writing within one year after the date of the notice of assessment that by reason of some error or mistake of fact in such return the assessment was excessive, the Commissioner General, after taking into account all relevant circumstances, may reduce the assessment to provide such relief as is fair and reasonable:
Provided that no relief shall be given under this subsection if the assessment was properly made in accordance with the practice generally prevailing at the time such return was made.
81. Reduced assessments in respect of persons other than companies or partnerships
Where any person other than a company or partnership fails to lodge an objection to an assessment in the absence of a tax return or otherwise, and the Commissioner General is satisfied that the tax charged is greater than the amount which should have been charged, he or she may within four years after the date of the notice of assessment reduce or cancel the assessment accordingly:
Provided that this section shall not apply in a case where tax chargeable in respect of any person in any tax year exceeds P1,000.
82. Determination of assessed loss
(1) Where, in relation to any tax year, the amount, as determined by the Commissioner General, by which the deductions allowable to any person under Part VI in relation to the carrying on of a business by that person exceed that part of the assessable income of that person which accrues from that business, the Commissioner General shall make a determination of such excess (referred to in this Act as "the assessed loss").
(2) The determination of the assessed loss of any person for any tax year under subsection (1) shall constitute the making of an assessment by the Commissioner General, and such assessment shall be notified in writing to the person assessed, and the provisions of this Act other than sections 85 and 86 shall apply as if such determination were the determination of the amount of the taxable income of such person for such tax year.
(3) For the purposes of this Act "assessed loss" shall not include a loss ascertained under the Tenth Schedule.
(1) Without prejudice to the powers of the Commissioner General under section 77, where a provisional return has been furnished by any person under section 66, the Commissioner General may proceed to make a provisional assessment in the amount of the taxable income disclosed in such return, and shall determine the tax payable accordingly.
(2) Notwithstanding any extension of time which has been granted under section 77 for the furnishing of a tax return for any tax year, any tax payable under a provisional assessment shall be due and payable within the time specified in section 95, and may be recovered in the manner provided in Part XIII, but upon the furnishing of such tax return the Commissioner General shall make an additional assessment or a reduced assessment or confirm the provisional assessment, as the case may be.
(3) Any provisional assessment made under this section shall be subject to the right of objection and the time within which any such objection may be made in accordance with section 88 shall not commence to run until the date of service of the notice of additional assessment, reduced assessment or confirmation of the provisional assessment, as the case may be.
84. Time limits for assessments
(1) Subject to the provisions of this section, an assessment may be made in relation to any person under this Act at any time prior to the expiry of four years after the end of the tax year to which it relates.
(2) An assessment may be made at any time prior to the expiry of four years from the end of the four years specified in subsection (1) if the Commissioner General is satisfied that an amount which was subject to tax and should have been assessed under subsection (1) has not been assessed because the person in relation to whom an assessment should have been made under the said subsection (1)-
(a) has misrepresented certain material facts or neglected or failed to disclose such facts;
(b) has failed to furnish a tax return; or
(c) has furnished an incorrect tax return.
(3) Where a person in relation to whom an assessment should have been made under subsection (1) is deceased, such assessment may only be made within three years after the end of such tax year.
(4) Where any fraud or wilful default has been committed in connection with tax for any tax year by or on behalf of any person, and-
(a) such person is an individual who is alive at the time the assessment is made, or a person other than an individual, an assessment in relation to such tax year may be made at any time; or
(b) such person is deceased, subject to subsection (5), an assessment may only be made in respect of the tax year in which he or she died and the five immediately preceding tax years.
(5) In the case of an assessment made upon the executor of an estate of a deceased person in accordance with section 16, the assessment shall be made within three years of the end of the tax year in which such person died.
(1) Subject to subsection (2), a notice of assessment in respect of every person chargeable with tax shall be made and issued to such person in the prescribed form.
(2) The Commissioner General shall not be required to issue a notice of assessment other than a notice of reduced assessment to any person where-
(a) no liability to tax arises;
(b) the balance of tax due to be paid by him or her does not exceed P5; or
(c) the balance of refund of tax due to him or her does not exceed P1,
unless that person makes a request to the Commissioner General for the issue of a notice of assessment.
(3) In this section "notice of assessment" includes a notice of a reduced assessment, an additional assessment and a provisional assessment.
The Commissioner General shall maintain in such manner as he or she thinks fit a record of all assessments made in respect of each tax year.
(1) Subject to section 80(1) and (3) and section 81, where in relation to an assessment-
(a) no valid notice of objection has been given under section 88;
(b) subsequent to the determination of an objection, no valid notice of appeal has been given under section 91; or
(c) an appeal has been determined and there is no right of further appeal,
such assessment shall be final and not subject to appeal.
(2) Nothing in this section shall prevent the Commissioner General from making any additional assessment for any tax year which does not involve reopening any matter which has been determined on appeal for such tax year.
(3) Notwithstanding subsections (1) and (2), where any fraud or wilful default has been committed by or on behalf of any person in relation to his or her liability to tax for any tax year, the Commissioner General may make an additional assessment for such tax year even though it may involve reopening a matter which has been determined on appeal.
