It is tax season again but remember these changes to this year’s season: auto assessments and visits to the offices of the South African Revenue Service (Sars) make it easier for you to pay your tax if you are an individual provisional and non-provisional taxpayer or a trust.
Sars says the introduction of auto-assessments, among other enhancements, is in line with its journey of building a smart, modern revenue service with unquestionable integrity that is trusted by all.
This year, 3 million individual non-provisional taxpayers were auto-assessed and will not have to file a tax return if they are satisfied with the outcome. Sars used technology, data, artificial intelligence and algorithms to make it easy and seamless for most individual taxpayers to comply with their legal obligations.
The use of technology and data also enabled Sars to significantly sharpen its capability to detect non-compliance and make non-compliance hard and costly in the form of understatement penalties for taxpayers who deliberately attempt to claim impermissible expenses or understate their income. Administrative non-compliance penalties will also be used for taxpayers who miss the deadline.
Sars tax penalties
Sars also warns taxpayers that it has access to various sources of data that makes it possible for the taxman to track economic activity and verify the completeness and accuracy of tax declarations.
- An understatement penalty (USP) is charged for up to 200% of the amount if the state lost income when you did not submit a return, left information out when completing your return, made an incorrect statement in a return or failed to pay the correct amount of tax or made an impermissible avoidance arrangement.
- An administrative non-compliance penalty is a penalty of up to R16,000 per month for every month that a tax return is late.
According to Sars, it identified a large segment of non-provisional taxpayers who are formally employed, receive salaried income and have deductions such as retirement annuity, as well as medical aid contributions.
Using third party data from employers, pension fund administrators and medical aid schemes, Sars completes the tax declaration on behalf of these taxpayers and issue an auto assessment. The process started on 1 July when Sars will communicate directly with affected taxpayers by SMS and/or email, notifying them of their auto-assessments.
If a refund is due to you, Sars will pay the amount directly into your bank account within 72 business hours after the notification. If you owe Sars money, you must pay it into Sars’ bank account, eFiling or through the MobiApp by the deadline.
How to check your Sars tax return
Sars says taxpayers can access the auto assessment through any Sars channel, such as the Sars MobiApp or Sars eFiling, to review and verify the completeness and accuracy of the information. If you are satisfied with the auto assessment, you do not have to do anything further and the process stops at this point.
If you find information is missing and/or inaccurate about your income or expenses that can affect the outcome, you must declare it to Sars within 40 business days of the notification by submitting a tax return.
Sars also performs the necessary risk screening on all auto assessments and unless a taxpayer submits a return, Sars will not initiate any verification, audit or recall process. In exceptional cases, banks can flag risks to Sars and Sars will let you know.
The same Sars risk screening process will be applied for all returns submitted. This may initiate a verification and Sars will request taxpayers to submit supporting documents to substantiate the information declared on the tax return.
If you submit a return, indicating that they are not in agreement with the auto assessment, Sars will process the return and issue a revised assessment that could change your financial obligation, such as a reduced refund, increased refund or payment due to Sars.
Taxpayers will still have the right to initiate an objection, through the normal Sars objections process if they disagree with the revised assessment.
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If you do not get an auto assessment
Non-provisional taxpayers who did not get an auto assessment and are required to file a return can do so between 1 July and 24 October 2022.
Provisional taxpayers, as well as trusts, can start with filing a return between 1 July 2022 and 23 January 2023.
“Auto assessments is a key innovation designed to improve Sars’s service offering to taxpayers. It follows the principle that the best service is no service and will allow Sars to explore the possibility of eventually having no filing season, as we have come to know it,” Sars commissioner, Edward Kieswetter, says.
Sars is also urging taxpayers to wait for the email and SMS and not visit Sars branches during the first week of July and if they prefer to visit a branch, book an appointment on the system, by sending an SMS to 47277, with the word “Booking” (Space) ID number/Passport number/ Asylum Seeker number, or going to the SARS website (www.sars.gov.za) and clicking on the “Book an Appointment” icon.
Taxpayers can also use the SMS number 47277 to request a tax reference number, find out if they need to submit a return and get a statement of account.