This is the fourth year in which the South African Revenue Service (SARS) has been using third-party data, such as that obtained from your employer, to pre-populate your income tax return.
A record number of employers filed data about employee earnings this year, and SARS says that this process, together with the increased use of electronic returns, has resulted in tax filing season largely running smoothly. For this reason, SARS has needed to make only a few changes to the filing process this year.
One change concerns those who want to file a paper return. You should be aware that this year SARS is automatically sending Income Tax Return Request (ITRR) forms only to taxpayers over the age of 65 who filed a paper return last year.
If you did not receive an ITRR form and want to file a paper return, telephone the SARS contact centre on 0800 00 7277 and ask for one to be sent to you. Speak to an agent, who will ask you the questions about your income and expenses that are required to create your income tax return.
Remember to have your identity number and tax number at hand.
Alternatively, go into a SARS branch and ask for an income tax return to be sent to you or have a consultant help you to file your return there and then.
Another important change will affect you if you need to change your banking details.
Fraudulently made changes to taxpayers’ banking details remain one of the biggest risks that SARS has to deal with, and SARS has implemented new procedures to protect you from fraudulent transactions on your SARS account.
Any changes that you make to your banking details must be verified before your banking profile with SARS will be updated. If you are due any refunds, these will be processed only after changes to your banking details have been verified.
In order to verify your details, SARS may require you to take supporting documents to your nearest SARS branch.
You can change your banking details in the following ways:
* By taking your supporting documents in person to a SARS branch; or
* Via eFiling when you submit your return. But this may not be the end of the process: if SARS notifies you that it is necessary, you may have to take your supporting documents to a SARS branch.
If you have to present your supporting documents to SARS, you will need: your original identity document/passport, or a certified copy of these documents; an original bank statement (in colour or on a bank letterhead) not more than three months old, or, in the case of a new bank account, an original letter from the bank; and an original document that provides proof of your residential address.
To find out more about what supporting documents you can use to change your banking details, visit the SARS website, www.sars.gov.za. Click on the “I want to ...” link on the left of the page and then “Change my bank details”.
You can also telephone the SARS contact centre. But remember that the SARS consultant can advise you but cannot make changes to your banking details.
With stiff penalties for employers who do not declare to SARS what they have paid you, a record 235 882 employers filed reconciliations for the 2011 tax season, compared with 212 969 employers during last year’s tax season.
These employer declarations were accompanied by 14.8 million IRP5 certificates that contained information about taxpayers’ earnings, and SARS has used these IRP5s to pre-populate your tax return.
SARS also receives third-party data about the interest you earn on your investments, the sale of shares, your medical scheme contributions, your retirement annuity contributions and your income protection policy contributions.
SARS says it is best to be honest and to disclose all information on your tax return fully and accurately. It is a criminal offence to fail to declare all your income or to misrepresent your deductions.
Johan Swart, a tax manager at Legal & Tax Services, warns that since the inception of eFiling there has been a substantial increase in random audits performed by SARS, accompanied by severe penalties for false declarations on tax returns.
THERE’S STILL TIME TO COME CLEAN
If you have not declared all your income or assets for tax purposes and the South African Revenue Service (SARS) is not yet on to you, make use of the Voluntary Disclosure Programme (VDP) that will run until the end of October.
You have to declare your income and pay any tax you owe, but you will not be prosecuted for the acts or omissions committed before February last year that you disclose, and no interest or additional taxes will be levied on what you owe. You can also declare contraventions of the exchange control regulations to the South African Reserve Bank.
Bernard Sacks, a partner at global audit, tax and advisory firm Mazars, says you should use the VDP if you need to, because any similar programme that SARS offers in future is likely to be substantially more expensive.
To inquire about the VDP, send an email to [email protected]