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Tax Practitioner Connect Issue 18 (6 April 2020)

Welcome to the latest edition of Tax Practitioner Connect, the electronic newsletter for tax practitioners that keeps you up to date with the tax matters that affect you.  

SARS gratefully acknowledges the support from the tax practitioner community during one of the most challenging times in the history of our country. SARS will provide all taxpayer services via our online channels and contact centres during the nationwide lockdown that took effect from midnight on Thursday 26 March 2020 in view of the escalating COVID-19 pandemic.

Our branches and customs offices will provide a limited service to taxpayers unable to access our digital channels, strictly in exceptional circumstances and by appointment only. This arrangement will allow us to serve taxpayers, whilst limiting unnecessary contact between staff and the public.

Please note that by registering for eFiling taxpayers can access the following services:

1. Automatically register for personal income tax
2. Receive Tax Reference Number (TRN)
3. Update banking details
4. Account queries
5. Follow up on an audit or refund – send us an email to request feedback
6. Request a Tax Clearance
7. Make an electronic payment
8. Obtain Value-Added-Tax (VAT) notice of registration
9. Obtain PIT notice of registration
10. Lodge a dispute
11. View statement of account
12. Submit returns

For more information please visit our website on www.sars.gov.za

Historically SARS approached the Pay-As-You-Earn (annual and interim reconciliations) and the Tax Season for Individuals as completely separate events on the tax collection calendar. Our new approach is to view filing season as one seamless campaign divided into various distinct filing periods. Once third party providers have completed their obligations, the focus will shift naturally to individual taxpayers.

Commencing this year, SARS will be viewing PAYE and all other third party providers as essential role players at different intervals on the tax collection continuum contributing to the completeness and correctness of data including those of individuals. This approach will contribute to the achievement of our strategic intent of developing a tax and customs system based on voluntary compliance and where appropriate, enforced responsibly and decisively.

Our approach is informed by SARS’ 2024 vision based on the belief that our revenue collection efforts enable Government to transform the lives of many of our fellow South Africans.

Individual taxpayers are greatly dependent on third parties such as employers, banks, medical aid schemes and pension/retirement fund administrators for information that is essential for tax collection purposes. Over the years, SARS has collected this information to assist taxpayers with prepopulated returns.

Entities (individual and companies) that engage with SARS today are either data driven or their lives are hugely impacted by data and technology. This dependency on data and technology is rapidly on the increase. SARS’ 2024 vision acknowledges this as we strive to build a smart modern organisation by 2024 that will elevate the taxpayer’s experience making it easy to comply through real time usage of available data reducing the taxpayer’s administrative burden.

It is with this in mind that commencing this year, the filing season focus will shift from the PIT filing season to the employer PAYE reconciliation filing season. The rationale for this is that the PIT filing season accuracy levels and risks are largely dependent on the accuracy and completeness of data provided by third party data providers, especially that of employers.

This shift in driving compliance through third party data providers is informed by the insight that third party data can populate a running, real-time, accumulating and easily accessible individual tax account. This in turn will provide information such as an estimated year-end tax obligation and expected tax shortfalls, calculated with reference to PAYE payments, remuneration already paid, Retirement Annuity (RA) contributions, investment income, medical information and the like, all of which are populated in the individual tax account.

Building on this shift in driving compliance through third party data providers, we envisage that the concept of filing season will fade in the next couple of years and disappear by 2024 as part of our PIT/PAYE 2024 vision.

The Annual Reconciliation this year opens for submissions on 15 April 2020 and closes on 31 May 2020.

During the reconciliation employers are required to submit an EMP501 confirming or correcting the amounts declared as PAYE, Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF) submitted in the monthly employer declarations (EMP201) preceding the annual reconciliation. The final annual reconciliation is for the full tax year 1 March 2019 to 29 February 2020.

While there are no changes implemented for the 2020 Employer Annual Reconciliation, we encourage employers to submit their reconciliations accurately and on time. By doing so employers will be helping their employees to submit their tax returns on time and accurately during the individual filing season. This submission validates the amounts on the Employee Income Tax Certificate (IRP5/IT3 (a)).

We call on employers to be compliant in order to enable Government to build a capable democratic state for the wellbeing of all South Africans. Employers who do not comply may be subjected to penalties.

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