’Tis the season to start filing
May is a time to reflect on the impact of adhering to your tax obligations, as it contributes to optimal revenue collection and improvement of the quality of life for all citizens. Over the last few years, SARS has made great strides in revenue collection that enables government to provide services to the public and citizens, especially in the historically disadvantaged communities.
The gross tax revenue of R2.068t for the 2022/23 financial year represents a year-on year growth of 9.7%. This is a milestone achievement, since SARS has exceeded R2t gross revenue for the first time in our 25-year history. As we continue to do the right thing by paying our taxes, we should be reminded that tax compliance is aligned to the Bill of Rights as enshrined in the Constitution.
The deadline for the submission of the Annual Reconciliation Declaration (EMP501) is fast approaching. As an employer, it is important to ensure that your tax matters are in order and that you have accurately declared all relevant information.
Some of the rights that tax compliance upholds and promotes, include the following:
• The right to privacy, as envisaged in Section 14 of the Constitution.
• The right to information, as envisaged in Section 32 of the Constitution, read with the Promotion of Access to Information Act, 2000 (PAIA).
• The right to just administrative action as envisaged in Section 33 of the Constitution, read with the Promotion of Administrative Justice Act, 2000 (PAJA).
• Every adult citizen has the right (a) to vote in elections for any legislative body established in terms of the Constitution, and to do so in secret; and (b) to stand for public office and, if elected, to hold office. SARS is cognisant of all these rights and ensures that they are upheld and promoted in its interaction with taxpayers.
Employer filing season
Filing Season 2023 for employers opened on April 1 and will close on May 31 this year. Employers are required to file their annual reconciliation declaration (EMP501) during this period, reflecting accurate payroll information about their employees, employees’ tax (PAYE) payments made, and tax certificates (IRP5/IT3) (a)s generated, covering the full tax year from March 1, 2022, to February 28, 2023.
Filing Season 2023 for employers opened on April 1 and will close on May 31 this year
As an employee, ensure that your employer provides you with an IRP5 that has been submitted to SARS. If not, you will have difficulty submitting your own personal income tax return later in the year.
Providing clarity and certainty
To make it easy to reconcile, SARS provides information andguidelines that are simple and clear (more info on the SARS website: SARS).
This includes the following:
• Employers, tax practitionersand payroll administrators need to download the latest e@syFile version via the SARS eFiling website.
• Employers must submit outstanding monthly declarations (EMP201) and annual reconciliations (EMP501) to SARS prior to submitting the EMP501 for 2023.
• Employers must register employees for income tax purposes using single (“Individual ITREG”) and bundle IT registration (“Bundled ITREG”) for existing tax numbers as well as new registrations available on e@syFile.
Submission channels
Employers with up to 50 employees have a choice between using SARS eFiling or SARS e@syFile. Employers with more than 50 employees must use SARS e@syFile.
Penalties for non-compliance
An employer who files EMP501s late will be penalised under the provisions of paragraph 14(6) of the fourth schedule to the Income Tax Act, where the penalty will be equal 1% of the year’s PAYE liability, for each month that the return is late and increment up to 10% of the year’s PAYE liability.
