Be alert to Sars’s autoassessments this year
THE SOUTH African Revenue Service (Sars) has introduced a phased approach to the annual tax season that normally opens on July 1.
The first phase ends at the end of May, when employers have to file their reconciled payroll tax returns. An important change this year is Sars’s drive to “auto-assess” a significant number of taxpayers before the end of August.
Taxpayers who are not satisfied with the auto-assessment will be able to change it, and submit returns from September 1.
Tax practitioners have cautioned taxpayers to remain vigilant with regard to their tax affairs and to ensure that they check the auto-assessed return before accepting it. The filing season will run from September 1 to the end of January next year.
Non-provisional taxpayers (people with only salaried income and no additional income sources, such as interest or rental income) will have until November 16 to file their returns through efiling.
Individuals who are non-provisional taxpayers and traditionally file at a branch will be able to do so until October 22. Provisional taxpayers (taxpayers with different income streams) have until the end of January next year to file.
Sars will use information received from employers, financial institutions, medical schemes and other third-party data providers to prepopulate the returns and calculate the tax liability.
If a taxpayer accepts the auto-assessment, any under or overpayments will be processed as normal. It will also not be necessary for the taxpayer to file a return. If a taxpayer does not accept the assessment, they can edit and file their return from September 1.
The new Sars system of filing is designed to produce correct assessments. However, it is imperative to check and not rely solely on the Sars assessment, said Adelaide Kekana, a tax consultant at Tax Consulting SA.
“If you do not respond, Sars will assume that you agree with the assessment. We expect the 2020 Tax Season to be a bit of a roller-coaster ride, and we are concerned that taxpayers will relax and abdicate their tax obligations,” said Kekana.
Sars has also introduced several measures to deal with the Covid-19 lockdown to limit visits to branch offices to avoid long queues. However, taxpayers have been experiencing teething problems with the additional “digital offerings” introduced shortly after the hard lockdown started.
Elle-sarah Rossato, the head of tax controversy and dispute resolution at Pricewaterhousecoopers, said feedback from clients showed that Sars was still slow to respond to burning issues.
In terms of Covid-19 tax-relief measures, qualifying companies would have 35 percent of their total employees’ tax liability deferred and 35 percent of their provisional tax liability.
Rossato, the chairperson of the tax administration committee of the South African Institute of Tax Professionals, said despite updates on the Sars website, a number of unanswered questions relating to the practicalities of the tax-relief measures remained.
Amanda Visser is a freelance journalist who writes about tax and financial matters.