Tax sea­son is here. . . do not pro­cras­ti­nate

There is a gen­eral trend to de­lay the sub­mis­sion

Sunday World - - Jobs - Syd­ney Sekese

It is of­ten said that there are two cer­tain­ties in life, namely death and taxes. There seems to be tax on ev­ery­thing. There is tax on our in­come, tax on some gro­cery items, tax on petrol, and yes even tax on death.

There is a gen­eral trend among South Africans to de­lay the sub­mis­sion of their tax re­turns. This pro­cras­ti­na­tion leads to un­nec­es­sary penal­ties. There are law­ful struc­tures in place lead­ing to you not pay­ing tax. It can be done us­ing tax avoid­ance meth­ods.

These are le­gal ways a tax­payer can re­duce the amount of tax that he/she owes. Tax eva­sion, how­ever, is when a tax­payer il­le­gally avoids pay­ing tax and can get a tax­payer into se­ri­ous trou­ble.

Tax avoid­ance when prop­erly struc­tured, could re­sult in a windfall re­fund from SARS. The tax sea­son for in­di­vid­u­als opened since 1 July 2018. Dead­lines for sub­mis­sion of tax re­turns are loom­ing large. For ex­am­ple the dead­line for man­ual fill­ing by post or at SARS branch for pro­vi­sional and non-pro­vi­sional was 21 Septem­ber 2018.

e-Fil­ing or Elec­tronic fil­ing at SARS branch for non-pro­vi­sional tax­pay­ers is 31 Oc­to­ber 2018. The dead­line to e-File for pro­vi­sional tax­pay­ers is 31 Jan­uary 2019.

The other rea­son most of us dread the tax sea­son is due to some in­tim­i­dat­ing jar­gon re­lated to tax mat­ters. Let me ex­plain a few ter­mi­nolo­gies. Most of SA in­di­vid­u­als are non-pro­vi­sional tax pay­ers who are salary earn­ers are and have no other sources of in­come.

Pro­vi­sional tax pay­ers are peo­ple who earn in­come other than a salary/re­mu­ner­a­tion. If you get in­come such as rental in­come from a prop­erty, in­ter­est in­come from in­vest­ments or other in­come from a trade, you will al­ways be a pro­vi­sional tax­payer, even if you also earn a salary.

There are some pro­vi­sions and pro­ce­dures that need to be fol­lowed to en­sure that you are com­pli­ant and not con­tra­ven­ing the law. First of all in or­der to file your tax re­turns you need a tax ref­er­ence num­ber.

SARS will not pro­vide your tax num­ber to an­other per­son, un­less the per­son is your tax prac­ti­tioner or has power of at­tor­ney to con­duct your tax af­fairs. Fail­ure to sub­mit tax re­turns will at­tract penal­ties.

The min­i­mum penalty for an in­di­vid­ual is cur­rently R250 per re­turn per month. This means that where four tax re­turns are out­stand­ing, a min­i­mum penalty of R1 000 per month will be is­sued.

You may take ad­van­tage of some clever ways to get your fil­ings in or­der and save money when you sub­mit your tax re­turns.

For ex­am­ple up to 27.5% of tax­able in­come, capped at R350 000 per year, may be de­ducted from your in­come in re­spect of re­tire­ment an­nu­ity and re­tire­ment funds con­tri­bu­tions made be­fore 28 Fe­bru­ary 2018.

In March 2015 the govern­ment in­tro­duced a tax-free in­vest­ment prod­uct to en­cour­age us to save our af­ter-tax money.

You can in­vest R33 000 per year (up to a max­i­mum of R500 000 over your life­time) and ben­e­fit from growth free of div­i­dends tax, in­come tax on in­ter­est and cap­i­tal gains tax. ■

Sekese, the 2016 Fi­nan­cial Plan­ning In­sti­tute (FPI) me­dia award win­ner, is a reg­is­tered fi­nan­cial plan­ner pro­fes­sional and a mem­ber of the FPI

/ ESA ALEXAN­DER

A SARS em­ployee as­sists clients at the rev­enue ser­vice of­fices on Long Street, Cape Town.

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