The SARS Commissioner announced preliminary revenue results on April 3, 2023, under the theme of building a solid foundation for sustainable revenue growth. The total revenue collection is R1,687 trillion, with the SMME segment accounting for 28% (R373 billion) of this total. The main sectors are Finance, Manufacturing, Wholesale, Retail Trade and Catering.
Key messages from webinars and outreach activities
During October – December 2022, the Segment hosted webinars to promote voluntary compliance among SMMEs. Thus, the dispute process webinar was aimed to educate taxpayers on how and when to file disputes, as well as the timeframes involved in the process.
Common errors were discussed:
- Submission of incorrect declarations (underestimation) then SARS will raise assessment, and this can lead to a dispute.
- Not adhering to the prescribed time frames for submitting supporting documents and which leads to raising of assessments
- When capturing amount in a return, cents must be excluded otherwise wrong figures are captured in a return which leads to disputes.
- SMME’s that fail to submit tax returns are imposed administrative penalties and this might lead to a dispute.
- Taxpayers do not stipulate the exact issues which they are filing an objection against and the legal grounds to support the objection. If this is not clear, the objection is invalidated and delays the objection process.
For us, it demonstrated that there is still much work to be done around disputes. No doubt, we have to provide clarity and certainty to make it easier for you to meet your tax obligations. If you missed this webinar, it is available and you could watch it here or click here for the presentation.
This was soon followed up by a webinar to educate the creative arts industry on their tax obligations and the options available to them to be tax compliant. Again, if you missed this webinar, you can still watch it here, or view the presentation on the fundamentals of taxation by clicking here.
Last but not least, we collaborated with the National Treasury on the Post-Budget Outreach initiative to simplify the Budget Speech for easy understanding. The first Strategic Objective of SARS, that entails the outreach program, is to “provide clarity and certainty” to make it easier for taxpayers and traders to understand the budget content, among other key messages.
In addition, there is the Vulekamali online budget data portal designed to help citizens understand the country’s finances in a straightforward and simple manner.
Research outcomes summaries (on reasons for non-filing)
The recent figures have revealed that there is a lot of work that needs to be done to improve the SMME CIT filing rate. Thus, the Segment remains committed to provide the necessary clarity and certainty to make it easier for businesses to meet their obligations.
Compliance remains disappointingly low, and actually, there are signs of regression relative to last year’s compliance levels. This slide must be reversed at all costs. The audited numbers which will be released, will provide the actual numbers.
As SARS, we have established some of the motives and reasons for non-compliance. In fact, the SMME CIT Filing Compliance Survey Results conducted in the 2021/22 FY has given insight clarity on this challenge. The reasons the SMMEs cited included failure to file their returns. This was caused by lack of knowledge on how to complete and file returns, lack of assistance or support from SARS, administrative burden, lack of awareness of submission dates, and problems relating to eFiling, among others.
This has necessitated an aggressive approach to provide the sought-after clarity and certainty to taxpayers, especially in the segment.
The Minister of Finance, Mr Enoch Godongwana, tabled the 2022/23 National Budget before Parliament in Cape Town on 23 February 2022. This was his inaugural budget speech that was underpinned by the need to strike a critical balance between saving lives and livelihoods, while promoting inclusive growth.
The Minister highlighted that tax collections were much stronger than expected since the Medium-Term Budget Policy Statement (MTBPS), allowing for an estimate tax revenue of R1.55 trillion for 2021/22. This was R62 billion higher than the estimates in November 2022, and R182 billion higher than the estimates from last year’s budget.
The Minister congratulated SARS for making it possible for him to table the “Good News” budget. This was all due to the unexpected `windfall` of an extra R180 billion in tax collections.
For more information on the 2022/23 Budget, including the tax rates, go to the SARS’ Budget webpage 2022/23.
- The PAYE Employer Reconciliation Business Requirement Specifications (BRS) for the 2024 tax year was published on 24 February 2023.
- The length of the contact person’s first and surname in the “alpha field” was increased from 30 to 50 characters.
- On tax certificates, the first two names of employees were changed from free text to alpha and increased to 90 characters.
- The following source codes have been amended 2025, 2036, 3040, 3231, 3232, 3233, 3234 and 4150.
The Annual EMP501 Reconciliation Submission period is from 1 of April to 31 May 2023. The last [email protected] version is 7.3.1. Please visit our website to download the software and the release notes.
How do I pay?
If you want to make a payment to SARS, you have several options to choose from. Pay at a bank, via eFiling or via EFT. For more details on payment options, visit www.sars.gov.za
Companies are encouraged to have a Representative registered at SARS for the eFiling system to work effectively:
Registered Representatives at SARS can have the following benefits on eFiling:
- Search and add their SARS registered companies on eFiling
- Approve / Reject Tax Type activation
- Approve / Reject Tax Type transfer
- Activate the Registered Representative on eFiling to have full access
- Update the company Registered details on the Registration, Amendment and Verification Form (RAV01)
For further information, go to the Small Business webpage on the SARS website home page, select Businesses and Employers, then select Small Businesses – Taxpayers. Click here to visit the page.
10 March 2023 – Beware of the latest email scam saying that a letter of demand which requires your attention was issued, and telling you to click on the link to open the letter. Please ignore and don’t click on any links.
If in doubt, please send an email to [email protected]. See an example of the latest scam.
ITR14 Usability Roadshows
The SMME unit visited small businesses across the country to better understand their experience with the Income Tax Return (ITR14) form. As a result, they are currently consolidating recommendations to simplify the form. This work is in line with one of the SARS Strategic Objectives 2, that is, “to make it easy for taxpayers to meet their tax obligations.”
It is advisable to make duplicates of all documents and keep both hard copies as well as electronic versions of documents. Scanned copies can be safely stored online, even if the originals are lost or your computer is damaged or stolen.
Importance of keeping records
- Documentary proof is essential to enable you to claim actual expenses incurred.
- Expenses may be overlooked, unless you record them at the time they are incurred,
- Documents enable you to complete your tax returns accurately.
- All documents must be kept for a period of 5 years from date of submission of the return.
- Keep your invoices, till slips and other information together.
Upcoming education initiatives
SARS is committed to VISION 2024 to build a smart modern SARS. In pursuit of this vision, we have scheduled the next webinar to specifically focus on digital channels in April. We invite you to keep your eyes on our SMME webpage and our social media platforms like Twitter, Facebook and LinkedIn for the exact date.
Click Here for more workshop schedules.
Tax incentives are effective tools to promote economic growth. Thus, we encourage you to learn more about the following incentive tools:
- Turnover Tax – aimed at micro businesses that have a turnover of R1 million and below. For more information, click here.
- Small Business Corporation – Small businesses with an annual turnover of up to R20 million may qualify to pay Income Tax at a reduced rate. The following guide will help you make the right decision. For the qualifying criteria please click here.
- Employment Tax Incentive – is aimed at incentivising employers to hire young job seekers. Click here to see the qualifying criteria.