BUSINESS NEWS - The annual tax filing season for individuals is now fundamentally different from prior years.
The South African Revenue Service (Sars) announced a phased approach that started in April 2020 and will end in January 2021. According to Sars, the different phases will ensure a “seamless filing season”.
The first phase was allocated to employers and third party data providers (such as medical schemes, retirement funds and banks), who had to submit their information to Sars by the end of May.
During the second (current) phase Sars is validating the third party data. It will follow up on employers and other third party data providers that either did not submit information by the May deadline or that still have outstanding returns after failing to meet Sars’s verification requirements.
The South African Institute of Tax Practitioners (Sait) said in a note to its members that it supports Sars’s efforts to ensure that the data used to prepopulate individual taxpayers’ tax returns is verified and correct, thereby limiting the risk and time spent on objections and corrections once returns have been submitted.
However, members of the institute have expressed concerns about the limited time allowed for non-provisional taxpayers who cannot be auto-assessed to submit their returns this year. They only have from September 1 to November 16.
The concern is that the majority of returns that tax practitioners are responsible for aren’t suitable for auto-assessment – around 74%, according to a Sait survey. The result is that the time allowed for tax practitioners to submit non-provisional personal income tax returns has decreased drastically.
Sait has made a submission to Sars addressing these concerns.
Sait head of stakeholder management and strategic development Beatrie Gouws says the submission of employees’ tax reconciliations and other third party data forms the basis of the “modern-day” personal income tax return.
“By making use of structured and verified data provided by reputable third parties, revenue authorities all over the world are limiting the risk of accepting uncorroborated financial and biographical information from taxpayers,” she says.
Sars has shifted from being predominantly ‘tax return assessment’ focused to being more focused on anticipatory third-party data risk and verification assessment, she adds.