The South African Revenue Service (SARS) says it has introduced a number of improvements to ensure it is easy for you to comply with the rules when filing your tax return and paying the taxman what you owe.
Oupa Magashula, the commissioner of SARS, says SARS has two ingredients in the mix to ensure that South Africans are tax-compliant. One is to improve enforcement of the tax laws and the other is to make it as easy, convenient and quick as possible for you to meet your obligations.
To this end, Magashula announced some new measures SARS has introduced for the 2010 tax filing season. These include:
- Simpler and fewer provisional tax returns.
Provisional tax returns will be pre-populated and include your basic amount - the amount declared in the previous tax year - which you can use as an estimate of your income for the current tax year if you earn less than R1 million a year.
Provisional taxpayers will have to complete only five fields on their return. The electronic return will automatically calculate the amount of provisional tax you need to pay.
SARS has also decided not to send out paper or electronic provisional tax returns to all registered provisional taxpayers, because many forms are not returned or are returned with data that indicate no provisional tax liability.
Taxpayers who need a provisional tax return will have to request one from SARS. Tax- payers who do not have to submit such a return will not have to request a form or submit one, even if they are registered for provisional tax. Magashula says in the past if you were registered for provisional tax, you had to file a return and it was difficult to be deregistered.
SARS says you must, however, be aware that it is your responsibility to submit a provisional tax return. If you should have submitted a provisional tax return but you did not, SARS will be able to detect this when you submit your annual income tax return, and you may be charged interest and penalties.
Provisional taxpayers will also receive a statement of account that shows their recent transactions and the balance in their accounts.
- Control over your tax affairs.
Magashula says in a number of cases where SARS approaches taxpayers over their failure to submit a tax return, the taxpayer claims they gave all their details to a tax practitioner who failed to submit the return.
The taxpayer is unaware that the tax return has not been submitted, because all the warnings SARS issues to the taxpayer are directed to the tax practitioner.
In other cases, Magashula says, taxpayers change tax practitioners or decide to complete their own returns but then find that they or their new practitioner cannot access their electronic income tax return, because it is in the hands of the previous tax practitioner.
The commissioner says you are responsible for submitting your tax return, even if you employ a tax practitioner. As a result, SARS had decided to ensure that you always have access to eFiling, all correspondence from SARS and the status of returns and assessments, even if you employ a tax practitioner and grant him or her access to your tax affairs.
The new function on eFiling, dubbed "taxpayer centricity", will enable you to deny a tax practitioner access to your returns if you no longer want him or her to have access to them.
- Speedier eFiling.
SARS says it has enhanced the speed at which your electronic return will be generated on your computer by making use of Adobe Flash Player to display the return. If you do not have the latest version of this program on your computer, you can download it from SARS's eFiling website.
- Electronic signatures.
If you eFile your tax return from a SARS branch, you will now sign your return on an electronic signature pad instead of signing a printed paper copy of the return. SARS says this will enhance security and save it printing one million paper copies of returns.
- "eCase tracking."
If you eFile, you will have an improved view of the progress of your return, and SARS call centre and branch staff will also be able to access a full history of your interaction with SARS in order to help resolve your queries quickly.
- Queues and staff skills.
Magashula says SARS is aware that queues at its branches were far too long at the peak of tax filing season last year. Changes have been made to the queue system and SARS hopes this will help this year, he says.
The SARS contact centre can now handle many more phone calls, Magashula says, but SARS is still working on improving the skills of its call centre agents so that they can assist you with more complex queries.
When you must pay provisional tax
Provisional tax is a system of early tax collection designed to ensure that if you earn a certain amount of untaxed income, you pay tax on it during the tax year rather than only at the end of the tax year, when your tax is assessed.
Individual taxpayers under the age of 65 must register as provisional taxpayers if they earn income that exceeds R20 000 a year from sources other than a regular salary or pension. These sources include rental income, taxable interest income that exceeds the exempt amount of R22 300 (for people under 65), taxable dividends (usually from foreign companies), royalties, a taxable capital gain and any income you were paid by an employer from which Pay As You Earn tax was not deducted. The exception to this rule is: if you expect to earn less than the tax threshold (currently R57 000 for those under age 65), your interest, taxable dividends or rental income can exceed R20 000 for the year.
If you are over the age of 65, and your income consists exclusively of remuneration, interest, dividends or rental income and is less than R120 000 a year, you do not have to register as a provisional taxpayer.