JOHANNESBURG – The option to make a direct payment to the South African Revenue Service (Sars) through its eFiling, website without additional authorisation, will soon be withdrawn.
This will not only affect third-party users of the eFiling website such as tax practitioners, but also businesses and individuals who do their own eFiling, says Marika Muller, Sars media unit deputy-spokesperson.
Last week, Sars announced in a communication to taxpayers that the so-called debit pull transactions on eFiling will be phased out and discontinued over the space of one month, starting on September 4 2013.
By initiating a debit pull transaction, the payer or account-holder authorises the entity they wish to pay to collect the money directly from their bank on their behalf. With regards to eFiling debit pull transactions, Sars was authorised by the taxpayer to collect the money owing directly from their bank, which it did by instructing its bank to collect the amount from the taxpayer’s bank account.
Taxpayers are encouraged now to rather perform credit push transactions (a payment transaction performed by the bank account holder) or use one of the alternative methods of payment, such as over-the-counter payments at a bank, electronic transfer using internet banking or pay at a specific Sars branch.
Muller says in this case, eFiling will advise the taxpayer of the amount that needs to be paid as well as the payment reference number in the form of a payment request via the bank. The taxpayer would then physically have to authorise this request, which acts as an instruction to be irrevocable and can only be made if the account holder has the necessary funds.
During the phase-out period, debit pull transactions will still be available on certain payments, on condition that the approved representative agrees to the declaration that appears on the screen.
It was decided to phase out debit push transactions since credit push is a more secure process, in that the authorisation of the payment can only be done by the client with his or her bank, says Muller.
“There is also less risks in that a credit push transaction cannot be reversed,” she adds.
Sars stated that a message on eFiling will warn taxpayers that a debit pull transaction is no longer available.
“Therefore in order to perform credit push transactions, you will be required to register with your bank. Please contact your bank for further information on how to register and use credit push transactions,” it states in a communication to taxpayers.
Piet Nel, project director for tax at the South African Institute of Chartered Accountants (Saica), says the debit pull transaction has been flagged as a risk in the past.
In some cases, incorrect banking information was supplied on the eFiling website by mistake, he says.
The fact that payments could be made directly through the eFiling site, without authorisation by the bank account holder also left the door wide open for abuse.
Nel says the new process will reduce the risk that taxpayers can claim funds are unlawfully taken from their bank account.
However, its members are complaining that the payment process will now take much longer than it did before, he says.
Prof Sharon Smulders, head of tax technical policy and research at the South African Institute of Tax Practitioners (Sait), says although the institute understands that the new process tries to eliminate fraud, and it does agree with it to a certain degree, there are some concerns.
The new process won’t work with regards to all taxpayers, she says.
Where a tax practitioner is acting on behalf of a client who does not have access to the internet or electronic banking, it may introduce difficulties.
Tax practitioners do not have access to the bank accounts of their clients and clients would need to transfer money to their practitioner, who will need to make the payment out of their own account in some cases, she says.
Additionally, clients who previously paid their tax practitioner to take care of this whole process will now need to authorise payments and may need to go to a physical branch, which could affect the timing of transactions.
Smulders says employees in a particular company may also not have the necessary authority to release payments, and financial officers in higher positions might need to be involved.
Moreover, some banks aren’t currently able to fulfill the requirements of the new process.
Sait has submitted these issues to Sars for guidance.