The South African Revenue Service (SARS) launches the 2014 Tax Season.
This annual campaign has evolved into an important partnership between government and taxpayers who make a vital contribution to our country’s tax system.
It is a key indicator of how levels of tax compliance in the country continue to grow. For SARS the Tax Season is also an important test of its capability to service a growing body of taxpayers.
Our tax policy framework has proven resilient throughout the period of global contagion since the financial crisis of 2008. The balance between the three major tax types – Personal Income Tax (PIT), Value-added-tax (VAT) and Corporate Income Tax (CIT) – has provided a strong basis for our tax system to respond flexibly and sustainably to shifts in economic cycles.
Of the R899.8 billion in tax revenues SARS collected for the 2013/14 financial year, Personal Income Tax (PIT) – the tax type to which millions of working South Africans contribute – accounted for more than R310.9 billion, a third of total revenue collected.
In 2013 more than 15.4 million working individuals were on the PIT register. Of course not all these individuals are required to submit an income tax return to SARS.
As a public institution, SARS’s journey is to modernise its system and become more efficient in its administration. A review of 2013 Tax Season highlights the following—
- 6.5 million returns submitted for 2013/2014 financial year as at 31/01/2014 – 3.8% increase from 2012.
- 91.5% of eligible taxpayers submitted returns on time – by end of Tax Season November 2013 Deadline.
- 1.6million outstanding returns submitted from previous years – by end of January 2014.
- SARS received R804million in penalties from defaulting taxpayers – by end of January 2014.
- 99.877% of returns were submitted electronically – by end of January 2014.
- 94.83% of returns were assessed within 3 seconds – by end of Tax season November 2013 Deadline.
- 94.94% of refunds were paid in 72 hours – by end of January 2014.
- R16.1 billion in tax refunds were paid to 2.4million taxpayers – by end of January 2014.
SARS will continue to strive towards providing the best services possible to taxpayers and to extend its operational reach across the country. Over the past three years SARS opened six new branch offices. A refurbished and improved SARS branch office opened in Mthatha in the Eastern Cape last week. A new branch office opened its doors at Bara Mall in Soweto to complement the services already offered at the existing Soweto branch office.
As of today nine fully-equipped mobile tax units are being deployed to remote areas throughout the country. In 2013 the mobile tax units engaged with more than 752 000 individuals through awareness, tax education campaigns and the filing of returns across the country.
Who must submit an income tax return?
Analysis of Tax Season trends indicate that in 2013 about 1 million taxpayers submitted tax returns who were not required to do so. In the 2013 Budget, the income tax threshold was raised from R120 000 to R250 000 per year for taxpayers who are required to submit a tax return. This means that any taxpayer whose gross income for the year is below R250 000 DOES NOT have to file a tax return —
- Unless they earn a salary with no allowances from only one employer (i.e. they only have one IRP5 certificate);
- Unless they have any other form of income (e.g. interest or rental income) and
- Unless they claim deductions such as medical expenses, retirement annuities or travel expenses.
The change to the threshold removes the administrative burden to submit a tax return for many taxpayers. SARS now receives the income information for taxpayers in this income segment from their employers before the Tax Season starts.
If there is an uncertainty about who should submit a tax return, taxpayers can get assistance from SA Tax Guide Team on the Request For Information
This year SARS has further improved its ability to verify taxpayer information through third party data. We advise taxpayers that SARS will, in particular, focus on medical aid claims, retirement fund contributions, income protection policy contributions and taxpayers who submit revised returns for previous years.
Tax Practitioners — Recognition of Controlling Bodies
SARS has a legal duty to protect the tax system – and taxpayers themselves – against revenue leakage and any form of fraud and abuse.
Amendments to the Tax Administration Act (2011) require that tax practitioners, in addition to being registered with SARS, must also be accredited by their Recognised Controlling Body (RCB). These steps are to safeguard taxpayers using the services of a tax practitioner. The requirement aims to ensure that tax practitioners are adequately qualified and that there is recourse available, both to taxpayers and SARS, to address potential problems that may arise.
There are 11 accredited professional bodies for tax practitioners. Only an accredited tax practitioner will be able to complete and submit tax returns on behalf of their clients, update and maintain their clients’ registration details and register clients for new taxes. Unregistered intermediaries may not submit a tax return on behalf of the taxpayer and may not charge fees to taxpayers.
SARS would like to remind taxpayers that, even if they are using the service of a tax practitioner or an intermediary, the taxpayer remains personally liable for their own tax affairs and their own compliance. SARS will ensure that intermediaries like tax practitioners are properly registered and accredited when they manage the affairs of taxpayers.
Taxpayers should ensure the tax practitioner they use is registered and accredited.
This year SARS will also place a strong emphasis on combating Personal Income Tax (PIT) fraud. For the fiscal year ending on 31 March 2014, there are 20 criminal cases with the National Prosecuting Authority (NPA) for prosecution and SARS registered a further 32 fraud cases with the SAPS that resulted in the arrests of 63 individuals.
These cases involved fraudulent PIT refund claims of more than R80.6 million. To date six cases were successfully prosecuted.
SARS also secured R61 million that was fraudulently deposited into bank accounts (R31.7 million was fully recovered by the end of March) and prevented another R7.3 million fraudulent refunds from being released.
In the past when registering for a tax type at SARS, the taxpayer was required to give all their personal and demographic data on each occasion. In future this will be required only once after
SARS implemented a Single Registration solution in May this year.
Third party data, information from the Department of Home Affairs and the CIPC is used to verify registration particulars.
For existing taxpayers and traders, SARS uses its current data that has passed through verification checks, and only in cases where there are discrepancies will clients be contacted to verify the information.
All the taxes that the client has registered for are linked to their legal entity profile. This provides SARS with a single and comprehensive view of a taxpayer.
Changes to personal information—
To guard against identity fraud and to protect client information, SARS has put strict security and verification measures in place. Should a client wish to change their identity information (such as their name, ID number or registration number) physical authentication and visual inspection of supporting documents will be required. This means that the taxpayer or their authorised “representative person” will have to visit a SARS branch in person and present the relevant material.
No changes to identity information can be done through the contact centre or via post.
Changes to other registered details, such as banking details, addresses and contact details, can be effected via eFiling or on the tax return itself in the case of individuals. But these will be verified before the information is updated on the SARS system.
Deadline Dates for the 2014 Tax Season—
- Tax Season 2014 starts on 1 July 2014.
- The deadline for taxpayers who submit their tax returns manually by post or by dropping them off in a SARS drop box is 26 September 2014.
- The deadline for all non-provisional taxpayers is 21 November 2014. Non-provisional taxpayers are the majority of employed individuals who submit a tax return and who earn an income from one or more employer.
- The deadline for Provisional taxpayers who submit returns via eFiling is 30 January 2015. Provisional taxpayers using eFiling can make payments until
31 January 2015. Provisional taxpayers form a much smaller segment of the tax base and are those individuals with other forms of income like investment income, income from business activities, rental income, royalties income or directors of companies
Taxpayers who are concerned about emails or SMS messages claiming to be from SARS should: