The South African Revenue Service (Sars) will lower the interest rate it charges on outstanding taxes, duties and levies as from December 1 2003.
The rate at which interest is charged on outstanding taxes, duties and levies is equal to the rate determined by the Minister of Finance in terms of the Public Finance Management Act (PFMA) of 1999.
The so-called PFMA rate is currently fixed at 13% and following the decrease in the South African Reserve Bank repo rate in October 2003, Minister of Finance Trevor Manuel approved a reduction in the PFMA rate to 11,5% with effect from December 1 2003.
The prime rate charged by commercial banks is currently 12%, while the money market deposit rate is 7,8%.
The rate of interest payable on refunds of any overpayment of provisional tax is equal to the PFMA interest rate minus four percentage points. This rate is currently fixed at 9% and will drop to 7,5%.
The rate of interest payable by SARS in respect of refunds made due to successful appeals noted by taxpayers as well as certain delayed value-added tax refunds is equal to the PFMA interest rate.
The National Treasury will publish the new PFMA rate on November 28 by way of notice in the Government Gazette. — I-Net Bridge