Government Connect Issue 1 (December 2021)

Welcome to the SARS Government Connect newsletter

South African Revenue Services (SARS) is committed to collecting the tax and customs revenue that is essential to enable Government to build a capable State and to foster sustainable economic growth and social development that serves the wellbeing of all South Africans.

SARS’ vision is to build “a smart modern SARS, with unquestionable integrity, that is trusted and admired by government and the public”. In support of this, our strategic intent is to “develop a tax and customs system based on voluntary compliance.” Nine strategic objectives give effect to our mandate and vision, as indicated below.

SARS’ vision for Government is to represent a model, first fiscal citizen of the country who demonstrates a culture of voluntary compliance.

Government Connect is a new monthly newsletter intended to improve communication with the government segment through regular updates. It will enable sharing of information on developments within SARS with the aim of empowering and supporting government to achieve and promote voluntary compliance. SARS will use it to communicate:

Key, current issues in the tax landscape
Reminders of current and upcoming filing priorities
Updates on Education programmes
Updates on SARS system changes, and
-Introduction of new SARS products.

To effectively and efficiently serve all taxpayers, SARS has redesigned itself by establishing regions to enable speedy service and decision making closer to where taxpayers are located. This is to ensure that the issues/challenges that taxpayers experience with their tax issues can be addressed and resolved with improved response times within their respective regions.

SARS wishes to work more closely with Government as a taxpayer and as a strategic partner to improve voluntary compliance. Hence, we are exploring different avenues to improve our understanding of the issues you experience when dealing with SARS. Your feedback on how the SARS systems work or do not work, is important to us and we are developing channels to enable better feedback.

SARS extends filing season deadline

Government institutions are the single largest employer in South Africa. SARS would like to thank employers and taxpayers who have already complied, for responding to our strategic intent of promoting a culture of voluntary compliance. To afford other taxpayers the opportunity to comply with their legal requirements, SARS has decided to extend the filing season deadline for non-provisional individual taxpayers from 23 November 2021 to 2 December 2021.

SARS is acutely aware of the systemic issues the organisation has experienced, as well as the impact of load-shedding on taxpayers which made it difficult for taxpayers to file their returns. As a result, the date for levying of penalties on taxpayers who have not filed their returns, will be extended and implemented in January 2022.

SARS urges you to communicate this message to your employees to encourage them to use our convenient digital channels, namely, eFiling, SARS MobiApp, as well as the SMS service, on 47277. By sending an SMS to this number, taxpayers can book an appointment at a SARS branch, check if they need to file a return and/or access other services.

The SARS website has also been upgraded to allow for more digital services to taxpayers. For more information on these services, visit www.sars.gov.za

SARS remains committed to make it simple and easy for taxpayers to meet their legal obligations and believes that the extension of the filing season deadline will encourage greater compliance among taxpayers.

What’s new?

e@syFile latest version

The latest version of e@syFile 7.2.0 can be downloaded by clicking on the link below: https://downloads.sarsefiling.co.za/easyfilehome/easyfile.html

Dispute Process and Dispute Resolution for PAYE penalties

Penalties for late filing of Pay-As-You-Earn (PAYE) returns by employers was introduced this year. SARS is in the process of enhancing our Dispute Resolution process to allow for this penalty to be disputed separately from a PAYE late payment penalty.

If a taxpayer receives another PAYE penalty for the same tax period, she/he will not be able to complete a Request for Remission or lodge an objection against the added penalty on eFiling, if the prior Request for Remission or Dispute has been finalised.

The enhancements to the Dispute Resolution process should be ready soon, but if a taxpayer wishes to do a Request for Remission or Dispute in relation to this penalty, SARS will, as an interim measure, accept a written Request for Remission or ADR1/ ADR2 form in relation to the added PAYE penalty, depending on where in the process the matter is.

To use the interim process to submit a Request for Remission, Notice of Objection or Notice of Appeal, please follow these steps:

Step 1: Check on eFiling that the penalty amount for which you wish to request remission, object or appeal is blocked and cannot be submitted. If eFiling blocks you, then proceed to Step 2.

Step 2: Type or write a Request for Remission and include the reason for your request as well as the PAYE reconciliation period or transaction numbers of the penalties incurred, or the EMP201 periods. Before you do this, please visit the Request for Remission of Administrative Non-compliance penalty webpage to understand the legislative requirements.

Step 3: If you already submitted a Request for Remission but you remain aggrieved by the outcome then use the ADR1 form in the case of an objection. If you already objected and the objection was dismissed, and you wish to appeal, then use the ADR2 form. The ADR1 and ADR2 forms can be downloaded here https://www.sars.gov.za/find-a-form/

Step 4: Submit your Request for Remission, ADR1 or ADR2 to [email protected]. You will receive a case number, which must be used in any future correspondence with SARS relating to this matter.

Step 5: Once SARS has considered the request for remission, objection or appeal, SARS will notify you by way of a letter addressed to you via your your preferred channel of communication.

Read more about the dispute resolution process on our website Dispute Resolution Process – South African Revenue Service (sars.gov.za)

Click here to read the guide on How to submit a Dispute via eFiling.

Tswaing Municipality assets attached over tax bills

SARS in terms of its mandate, will use enforcement measures where non-compliance (outstanding returns and non-payment of debt) is consistent. The case below is an example of the consequences of such non-compliance.

The assets of the Tswaing local municipality in the North West province were attached by the sheriff as a result of a tax debt of R30-million owed to SARS. The local municipality, which covers the towns of Delareyville, Sannieshof and Ottosdal, submitted returns to SARS, but did not make any payments for Pay-As-You-Earn (PAYE), the Skills Development Levy (SDL) and the Unemployment Insurance Fund (UIF), which resulted in the tax debt of R30-million.

Private companies, government institutions as well as other employers are required by law to deduct these taxes from employees and then pay these monies over to SARS.

SARS Commissioner Edward Kieswetter expressed his deep concern at such wilful non-compliance. “SARS is left with no alternative to but invoke the law to deal with such non-compliant taxpayers. SARS is fully committed to uprooting the culture that has taken hold wherein the taxpayer files and submit returns yet withholds the payment. This type of behaviour deprives the fiscus of what is due and is unfair on other compliant taxpayers,” he said.

He concluded that “SARS has turned its attention to this practice, and all those who indulge in this behaviour can be assured that we will not look away, regardless of the taxpayer involved. While SARS remains open to engagement over payment arrangements, it will act without fear, favour or prejudice against recalcitrant taxpayers. This is a warning to all who have chosen to embark on this path of non-compliance.”

Turn-around times for refunds and audits

One of the questions SARS hears most often is “When will I get my refund?” The answer depends on whether you are entitled to a refund or not. In the case of Government institutions, this question frequently arises in the context of VAT refunds.

To avoid disappointment, ensure that your bank details are correctly reflected on your registered particulars on your eFiling account. You will receive a SARS “completion notification” and the payment of the refund can be expected within three business days thereafter.

If an assessment is selected for audit, the process is generally concluded within 21 business days from the date that all the required supporting documents are received by SARS. This is an area where SARS observes delays by Government institutions to submit supporting documents. SARS would like to encourage that audit queries are dealt with as soon as they are received.

Making it Easy to Comply

Tips for submitting supporting documents via eFiling and the SARS MobiApp

SARS MobiApp is becoming easier to use and more accessible to taxpayers, and the features have been further developed to make it easy to comply. You can use this channel to request your Tax Compliance Status and request an eBooking appointment with SARS without having to login first.

For more details, see the updated Guide to the SARS MobiApp.

When SARS verifies your return or banking details, and you are requested to submit supporting documents, you may use the following online channels:

eFiling and the MobiApp
SARS Online Query System.

It is important take note of the technical specifications that supporting documents have to adhere to before you can send them through.

Only .pdf, .doc, .docx, .xls, .xlsx, .jpg and .gif files will be accepted.
The maximum document size per upload may not exceed 5MB.
A maximum of 20 files for eFiling, and a maximum of 20 files for the SARS MobiApp may be uploaded.
Try to scan your documents in batches so that each file is not larger than 5MB.
Set the image setting on your scanner to 300dpi or less for optimal scanning quality
Your scanner must also be set to black and white (not colour).
Once you click “Submit return to SARS”, you will not be able to submit additional documents, as the supporting document link will no longer be available after declaring that you have submitted all your supporting documents.

Upload your documents via eFiling, MobiApp or the SARS Online Query System and ensure that your documents are NOT password protected.

This helps us to work with your case and improve turnaround times if all documentation is available as specified above.

Don’t use unregistered individuals posing as tax practitioners

Legislation has been passed in the Tax Administration Act to regulate the work of tax practitioners and protect taxpayers from abuse. Any person not registered with SARS and working as a tax practitioner can be prosecuted in terms of the law.

Checks to determine if a tax practitioner is registered by SARS:

Registered tax practitioners are not allowed to charge fees as a percentage of your expected tax refund (contingency fees).
You should not share your eFiling profiles and login details with these individuals as we have found that unregistered individuals tend to use this route to access SARS systems.
See SARS website for “Tax Practitioners” that focuses exclusively on registered tax practitioners with channels through which they can submit returns. There is no need to use your eFiling profile and passwords.
You can determine whether an individual is registered by asking for their Practitioner Registration Number (PR Number) that you can submit on the Tax Practitioners page to confirm registration.

You can report a tax practitioner on the SARS website by clicking on Reporting the unprofessional conduct of a Tax Practitioner (Section 241). If you are aware of unregistered individuals functioning as registered tax practitioners, you can report them through the link above.

Latest guides published by SARS Legal Counsel

SARS’ Legal Counsel recently published new guides. These guides are neither “official publications” as defined in the Act, nor are they binding on SARS. They are intended to assist taxpayers in the practical interpretation and application of the legal requirements and categorised per tax type, for ease of reference. The guides listed below, were published between 1 July and 10 August:

Income Tax

9 July: Guide to the Tax Compliance Status functionality on eFiling.

6 August: Basic Guide to Income Tax Exemption for Public Benefit Organisations (Issue 3)

11 August How to Register for eFiling and Manage Your User Profile (updated)

VAT

28 July: VAT Quick Reference Guide for Non-executive Directors