E-filing of tax returns is up and running, but so far the service is aimed exclusively at large companies or small businesses.
Individual taxpayers will probably only benefit from the new system of filling in their tax return on the internet in December, when service providers launch online provisional tax filing services.
In order to e-file your tax return you need to register with one of the five e-filing service providers appointed by the South African Revenue Service (SARS).
The service provider will inform SARS that you will be submitting your return over the internet. From then on SARS will no longer send you a paper return, but rather an electronic return via your service provider.
You will be notified via e-mail or SMS by your service provider whenever a new return from SARS has arrived for you to complete online.
When you have completed the form online, it will be sent directly to SARS's computer system. You will be notified by e-mail what tax is due to, or owed by, you.
You will then be able to pay by direct deposit, by cheque or through an online bank deposit.
At the moment, the e-filers are offering VAT, PAYE, Skills Development Levy and Diesel Rebate forms online.
Sheldon Quarmby, the sales and marketing director of one of the service providers, Taxbreak, says the first VAT forms were filed late in July, and the first forms for PAYE and the skills levy went through early in August.
Quarmby says the process was so smooth that some users phoned to check if their forms had in fact been filed with the SARS because it all seemed too easy.
He says a good number of large companies and small businesses have already signed up for e-filing, although some are still testing the water.
Rob Nowicki, a director of another service provider, Mytax, says some Mytax users started submitting forms in June and are on to their fourth batch of forms.
He says Mytax had conducted a telephonic survey of its users and was very encouraged by the positive response.
Tracy Williams, a spokesperson for Infotax, says the first filing on August 7 went very smoothly.
Eric van Rensburg, the manager of Dimension Data's i-Commerce unit, which offers another of the registered e-filing providers i-Tax Services, comments that e-filing is taking the country by storm: "Since i-Tax went live last year, we've handled about 100 000 tax directives."
Nowicki, Williams and Van Rensburg say there are still problems with online payments to SARS, as some banks have yet to align their systems with SARS to facilitate these payments.
Nowicki says that, of the big four banks, Standard Bank and Nedbank are still unable to support online payments. However, users can still e-file and pay by cheque or through a direct deposit.
All the big banks in South Africa are likely to be ready for online payments by later this year, when provisional tax forms are due to go electronic, according to Nowicki.
As for the regular income tax return or IT12 form, Nowicki says the problem Mytax encountered was that it is not a simple form to complete but requires taxpayers to submit a fair amount of supporting documentation.
He says SARS needs to rethink this and would probably move towards a form that included a degree of self-assessment. If SARS then doubted the assessment you submitted it would call for the supporting documentation.
However, before this could be implemented, laws would have to be amended. Because of this it was not possible to predict when these forms would be available for e-filing.
Currently many of the e-filers are quoting fees that include a registration cost and a monthly subscription fee that includes a certain number of returns. These fees are aimed at business users.
Nowicki says the fees are likely to be between R30 and R70, depending on whether you just want to enter data on your form or whether you want to use one of the e-filer's wizards - programmes to help you calculate, for example, your travel allowance deductions.
Quarmby says Taxbreak will charge individuals a flat R40 per return with no registration or subscription fee. This is also the fee quoted for individual returns by i-Tax Services.
Quarmby says this fee is likely to be fairly standard across the five e-filers. They will compete for your business on the basis of added-value services such as tax news, tips or online calculators.
Van Rensburg says one service which is already being offered to individual users is a tax directive when you leave a pension or provident fund.
Requesting this online will take 24 to 48 hours as opposed to the present month or two. Once you have the directive it is easier to get payment from your pension or provident fund.
Van Rensburg says that if you wish to request a tax directive, i-Tax requires a simple registration. The service will cost about R75.
Once you have requested a directive, the i-Tax call centre will check up on the progress of your request.
If you need to supply more information you will be reminded to do so and if your request is not answered promptly the call centre will take the matter up with SARS.
To use this service follow the New Clients - Certificates and Directives link on the i-Tax website, the address of which which can be found in the box alongside.
Official e-filers
The five e-filers can be found at: