Companies that have been behind in lodging their annual tax returns with the Companies and Intellectual Property Registration Office (Cipro) last week caused its electronic site to stall as they rushed to meet the deadline.
The Companies Act requires that all companies file an annual return providing up-to-date information with the agency. If companies do not file, Cipro assumes they are no longer in business, and deregisters the entities.
Closed corporations must file returns in the month in which they were registered, even if some of these entities are shelf companies. Cipro had given companies that have been in arrears for the past two years grace until Friday to comply.
Elsab'e Conradie, head of communication, marketing and stakeholder relations, says the Web site was flooded with companies filing their returns on Thursday and Friday last week. She says this may result in some people not being able to successfully log in.
However, if companies can provide proof of their attempts to comply with the legislation, Conradie says they will be assisted and will not be deregistered. Those companies that were in arrears and did not file will be deregistered by the agency.
Overloaded
On Thursday, 12 200 annual returns were electronically lodged, which placed a lot of strain on the system. Acting CEO Lungile Dukwana says the “number of lodgements has been increasing since the last two weeks”.
About 1 350 walk-in customers were served during office hours on Thursday, while another 250 were assisted with returns after hours. Conradie says another 10 261 returns were received on Friday. The Web site usually handles 8 000 returns a day.
Because of the extremely high volumes, the Cipro system was overloaded and there were customers who were not able to lodge their returns successfully. Conradie explains that the agency's systems are old, and people tend to leave these tasks to the last minute.
Customers who are deregistered for failing to lodge annual returns have a chance to restore the registration of their business. However, they will still be required to pay outstanding penalties on their annual returns, as well as a restoration fee of R150. Their businesses will only be restored after receipt of the payment.
Customers who are in arrears, but whose annual returns are due in August, or until December, have time to lodge their returns before the next phase of deregistration commences.
Old systems
Meanwhile, Cipro is still intent on getting its new enterprise content management (ECM) system implemented by the October deadline, which is when the new Companies Act comes into effect.
Conradie says the agency will continue to implement the new system, as it still requires the software to be in place before the deadline. She says, however, that the decision around how to move on with implementation, which stalled when Valor IT's contract was cancelled, is with the Department of Trade and Industry (DTI).
A forensic investigation, conducted by Specialised Security Group, completed in March, revealed several discrepancies in the awarding of the R153 million ECM contract. The new IT system is meant to overhaul Cipro's aging processes and move functions onto an electronic basis.
However, implementation is hampered by Valor IT's court bid to have the contract declared valid. The matter is yet to be heard in court.
Last week, Sidwell Medupe, director of media and public relations at the DTI, said: “We are going to proceed with the development of the enterprise content management system, as this is needed for our operations and to deliver services to the public.”
He did not explain how the department intends proceeding with the implementation, or whether it would be ready in time for October.
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