At this month's launch of the 2012 tax season, which runs until January for some taxpayers, Finance Minister Pravin Gordhan said South Africa's tax compliance and e-filing system were among the best in the world.
BRENDAN PEACOCK | BUSINESSLIVE
IT comes as no surprise that the most efficient, forward-thinking government department is the one that deals with revenue collection. This year, the 10th anniversary of the "tax season" concept, sees a host of new developments which remove almost all obstacles to filing your tax return - but that also means there will be penalties for failing to do so.
But non-compliance will be strictly penalized
At this month's launch of the 2012 tax season, which runs until January for some taxpayers, Finance Minister Pravin Gordhan said South Africa's tax compliance and e-filing system were among the best in the world.
The tax base comprises some 14million formally employed workers who submit information to SARS but don't all have to file a return.
Filing has come a long way from the 99% printed returns of just six years ago. That ratio has been reversed - in 2012 only 1% of tax returns are expected to be made manually. Employers now submit information to SARS to allow the receiver to pre-populate tax returns. Even banks, investment houses and car service companies now submit data to reduce the incidence of fraud and dishonesty.
Between five and six million workers are expected to file a return this season, which will bring the country a third of its revenue for the year. According to Gordhan, 60% usually receive a refund, while 20% will remain tax-neutral (their assessment is correct and no payment needs to be made by either party) and 20% will have to pay in more money.
He said it would have taken three months to receive an assessment in 2006, the wait has been reduced to less than three minutes in 2012. For the 33000 taxpayers who e-filed their returns by 10am the day after tax season opened, the average time taken to provide an assessment was less than 10 seconds. Refunds can be paid within 24 hours.
This year SARS is rolling out a smart phone and tablet app, as well as a mobi site for those with regular cellphones or BlackBerrys (see sarsefiling.mobi or visit www.sarsefiling.co.za to be routed to the mobi site).
In addition, an industry-leading co-browsing initiative is up and running to help those who may have access to the internet but are intimidated by the task of filling in their own tax return.
The new Help-You-eFile system allows you to call an agent at the SARS help desk, get a once-off PIN and invite them to your browsing session. The SARS agent will not be able to see sensitive information (like your banking details), but will be able to guide you through the process over the phone and highlight relevant fields and information on your screen while you complete your return. The SARS agent cannot insert information or make changes, so it's completely safe.
In addition, SARS has started a YouTube channel (see youtube.com/sarstax) with tutorials on completing your return.
By the same token, however, because the process has become so easy to manage, SARS said there will be penalties for every month your return remains outstanding; if you fail to register as a taxpayer when you're eligible; or if you don't inform SARS of changes to important personal information.
Taxes go beyond borders
Foreign expatriates working in South Africa and South Africans working abroad all need to file a tax return, unless they have special permission not to file.
Shohana Mohan, associate director of expatriate tax at BDO, says the way expatriates - outbound or inbound - file returns depends on tax-residency status. A tax resident is one who considers SA the place to which he will return from his wanderings. A non-resident may achieve tax-residence status in SA by virtue of physical presence in the country.
A tax resident abroad will therefore file a return disclosing worldwide income and capital gains, while a non-resident in SA will disclose SA-sourced income and capital gains, with certain exclusions.
"Unless you have lived outside the country with a degree of permanence and have no intention of returning, a South African working abroad is required to tender an annual income tax return."
Mohan says whether or not a tax resident is eligible for tax relief on employment income derived for services rendered outside the country will depend on the time spent outside SA . To qualify for relief from tax on employment income earned abroad, a resident working abroad must spend at least 61 continuous days outside SA and an aggregate of 184 days over any 12-month period .
To prove your status, it's important to keep records of your working periods in and out of SA .
SARS accepts passport copies, travel itineraries, employment contracts or secondment letters and proof of tax paid or payable in a host country as proof. Travel logs should include not only the number of days spent in and outside the country, but also indicate workdays versus non-workdays. - Brendan Peacock
Deadlines for your tax return
You can register at www.sarsefiling.co.za and e-file your return there, or visit a SARS branch, or post it to SARS. The deadlines are:
For submitting your return manually, either by post or dropping it off at a SARS drop box - September 28 2012;
For most taxpayers, who will submit their returns electronically via e-filing - November 23 2012. The same stands for returns submitted electronically at a SARS branch;
Provisional taxpayers who submit their returns via e-filing, have until January 31 2013.
Who is eligible to register and/or file a return?
This year's income tax return is called the ITR12 and you are eligible to file if you are under 65 and received an income of more than R59750 from one or more sources or received R120 000 or more from a single source of employment during the past year of assessment, which was from 1 March 2011 to 29 February 2012.
You are also eligible if you are aged 65 to 75 and you received an income of more than R93150 from one or more sources, or you received more than R120000 from a single source of employment during that period.
Finally, if you're over 75 and received more than R104261 from one or more sources, or you received R120000 or more from a single source of employment during the specified period you're also eligible to file an ITR12.
Anyone who received an allowance, such as that for travel, subsistence for being an office bearer, those who hold funds or assets outside of the country over R50000 in value, have experienced a local capital gain or loss exceeding R20000, received any income or capital gain in a foreign currency, held any rights in a controlled foreign company, conducted trade in South Africa or received a tax return or were requested to submit one, is eligible. - Businesslive
