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Income Tax Act, 1962 (Act 58 of 1962)

Chapter III: General Provisions

Part II: Assessments

78. Estimated assessments (Repealed)



[Repealed by the Tax Administration Act, 2011 (Act No. 28 of 2011)].


1) In every case in which any person makes default in furnishing any return or information or the Commissioner is not satisfied with the return or information furnished by any person, the Commissioner may estimate either in whole or in part the taxable income in relation to which the return or information is required.


a) Where the Commissioner has reason to believe that any resident has not declared or accounted for-
i) any funds held in foreign currency or any assets owned by that resident outside the Republic; or
ii) any funds in foreign currency or assets outside the Republic from which any income or capital gain would be attributable to that resident during the relevant year of assessment in terms of section 7 or Part X of the Eighth Schedule,

in any return contemplated in section 66(1), the Commissioner shall estimate the amount in foreign currency of any such funds or the market value in foreign currency of such assets, that he or she believes are owned by that resident outside the Republic on the last day of that year of assessment, after giving that resident notice to account for those funds or assets and that resident has failed to so account within the period stated by the Commissioner in that notice.

b) The amount or value in foreign currency contemplated in paragraph (a) may be estimated after taking into account any information at the disposal of the Commissioner including, but not limited to, information relating to-
i) any funds or assets transferred by that resident from the Republic;
ii) any funds or assets received by or accrued to that resident from any source outside the Republic; or
iii) the period that has elapsed since those funds or assets were transferred, or funds or assets were received or accrued.


1B) The Commissioner shall estimate an amount of taxable income derived from any funds or assets contemplated in subsection (1A), which estimated amount shall be calculated by applying a percentage, determined at the rate contemplated in paragraph (a) of the definition of ‘official rate of interest’ contemplated in paragraph 1 of the Seventh Schedule during the year of assessment to the estimated amount of those funds or value of those assets or such higher amount as may be estimated in terms of subsection (1).


1C) The amount of taxable income estimated in terms of subsection (1B) shall be-
a) translated to the currency of the Republic on the last day of the relevant year of assessment at the ruling exchange rate at that date to determine the amount to be included in taxable income; and
b) taken into account by the Commissioner during any succeeding year of assessment in estimating the amount of any funds in foreign currency or value of any assets owned by that resident outside the Republic, as contemplated in subsection (1A).


2) Any such estimate of the taxable income as contemplated in subsection (1), or the estimated amount of any funds or value of any assets as contemplated in subsection (1A), shall be subject to objection and appeal,

: Provided that if it appears to the Commissioner that any person is unable from any cause to furnish an accurate return of his income, aggregate capital gain, aggregate capital loss, or amount of funds in foreign currency or value of assets owned outside the Republic, the Commissioner may agree with such person as to:

a) what amount of such income, aggregate capital gain or aggregate capital loss shall be taxable income, net capital gain or assessed capital loss; or
b) the amount of the funds in foreign currency or value of the assets owned outside the Republic,

and any amount or value so agreed upon shall not be subject to any objection or appeal.


3) For the purposes of this section, ‘foreign currency’ means currency other than the currency of the Republic.