Global Courant
South Africa’s tax season kicks off at 8 p.m. on Friday (July 7).
During this tax season, the South African Revenue Service (SARS) will once again use the automated review process, which uses third-party data to provide tax returns to taxpayers.
Automatic assessments have been rolling out since the beginning of the month, with many taxpayers already receiving their notifications from SARS.
However, Meagan Fraser, a tax specialist at Allan Gray, says it is still critical that South African taxpayers understand their reporting obligations to ensure compliance and avoid penalties if they disagree with the automatic assessment and get on with their tax affairs.
To prepare
First, taxpayers should collect all of their relevant tax certificates for the 2023 tax year before filing their returns, Fraser said.
This includes their IRP5/IT3(a) from their employers and their tax certificates from their banks, medical aid schemes, annuity funds, investment managers and other relevant service providers.
Even as taxpayers are selected for SARS car assessment, Fraser said it’s critical that this step is followed.
Understand the automatic review process
In addition, taxpayers should know what to expect from the automatic review process.
From the beginning of July, taxpayers will receive a notification via email or SMS that an automatic assessment will be issued.
Taxpayers can then view the assessment on eFiling or the SARS MobiApp to ensure that the return is accurate.
New due date
Unlike last fiscal year, taxpayers now have until October 23, 2023 to review and file charges if they disagree with SARS’ automatic assessment.
The new due date is when the tax filing season normally ends, which should allow enough time for the assessment to be reviewed.
Fraser said that if SARS files a return after this date, taxpayers will have 40 business days from the date of notification to file a new return.
Actions for automatically assessed taxpayers
In addition, taxpayers with automatic assessment can log in to eFiling or the SARS MobiApp to check their assessments.
They will also be able to check the data used during the attack and compare it with their tax certificates.
If the taxpayer has no difficulty with their tax return, they do not need to take any further action and SARS will complete their return once the due date has been reached.
Fraser added that taxpayers should check for any refunds or outstanding amounts, with timely payments made before the due date listed on the Notice of Assessment (ITA34) to avoid interest or penalties.
Disagreements with automatic review
If a taxpayer disagrees with their automatic assessment, they must open their return on eFiling or the SARS MobiApp to correct it and file a new return no later than October 23.
While taxpayers cannot edit third-party data, they can add missing information.
If the pre-populated information is incorrect, taxpayers should contact the relevant third party to rectify the issue.
Taxpayers can then renew and submit their tax return after confirming correct data entry. It may take several times for it to appear.
In addition, Fraser said it is critical that South Africans accurately report additional income and deductions, such as capital gains, rental income and uncovered medical expenses, as failure to report all income could result in SARS being fined.
“Not all South Africans are required to file a tax return. If your taxable income for assessment year 2023 is higher than the tax limit, you must file a return. However, there are exemptions for those who are automatically assessed or have specific types of income,” Fraser said.
“Certain circumstances, such as conducting a business, selling assets, owning foreign currency, earning an overseas salary, or receiving a request from SARS, may also require you to file a return.”
“Non-South African taxpayers are generally not required to file a return unless they have received South African interest or engaged in specific activities. Use the SARS website questionnaire to clarify your submission obligations.
Read: SARS cracks down on moving money abroad – what you need to know
