Speedy new tax compliance system
A NEW system that is expected to speed up the process of obtaining tax clearance certificates came into effect yesterday.
Businesses are required to submit tax clearance certificates to the South African Revenue Service (SARS) when they apply for state tenders and individual tax payers need them to prove tax compliance when they emigrate from South Africa.
The process has been plagued by frustration and delays.
Obtaining a certificate can make or break a company that requires the document to win a tender it needs to survive.
PwC said there had been many instances when data from SARS was inaccurate.
Taxpayers will have to be registered for the electronic filing system (eFiling) and have at least one “tax product” such as Income Tax‚ or Pay-As-You-Earn activated.
The new system will allow taxpayers to obtain a unique pin which can be used by third parties such as government (for tenders) or the Reserve Bank (for the foreign investment allowance) to verify compliance status.
The taxpayer will be able to control the useful life of the pin – which can be valid for one to 12 months – and to cancel a pin after the need for a third party to access the compliance status expires.
They will also be able to print a certificate through the eFiling system‚ eliminating the need to visit a SARS branch. Outstanding issues or queries can also be resolved electronically and supporting documentation can be uploaded.
“Taxpayers can monitor their tax compliance status on a more frequent basis‚ and not end up with surprises when clearance is required‚” said PwC.
Chérie Carstens‚ tax technical team leader at the South African Institute of Tax Professionals‚ said it was a noticeably better system.
“A compliance status is provided in real-time as opposed to the old system where a tax clearance certificate would be valid for a year‚ in which time a taxpayer could become non-compliant,” she said.
She said the new system also allowed one to challenge a status online – if SARS says a taxpayer is non-compliant, he can “argue” it and provide proof.
Carstens said it was also a better system to combat fraud.
Paper certificates are easy to manipulate (copying and distributing illegally).
Fraudsters are less likely to get away with electronic pin numbers linked to a taxpayer.
Mazars tax consultant Sharon Machutchon said if the taxpayer obtains the green light‚ they are able to access their tax clearance certificate immediately.
“Where the taxpayer does not obtain a green light the taxpayer is able to rectify the issue relating to the noncompliance electronically within a short period of time.
“This eliminates the taxpayer having to go into SARS to inquire about the noncompliance.”
PwC said limited options would initially be available to taxpayers to rectify their compliance status.
Current online remedies include submission of outstanding returns‚ payment of outstanding amounts‚ correction of accounts and challenging a compliance status. — BDlive