TAX BITES – What is an IT88?

Many South African taxpayers owe SARS administrative penalties for failure to submit their personal income tax returns. If a taxpayer fails to respond to notices or demands concerning outstanding administrative penalties, SARS may under Section 179(1) of the Tax Administration Act, No.28 of 2011, initiate collection proceedings for outstanding penalties or taxes due by the taxpayer.   Similar to a garnishee order, an IT88 is a deduction order issued by SARS, which allows them to electronically collect outstanding penalties via the employer of a taxpayer who owes SARS money for prior taxes.   Once an IT88 is issued, an employer is instructed that money must be deducted from the employee’s monthly salary and paid over to SARS to recover the outstanding debt. This payment does not relate to the usual PAYE deducted from the employee’s salary but is an additional deduction to be paid over to SARS.