SARS has not forgotten you!
For those individual taxpayers who keenly await the arrival of their annual tax return in the post, the wait is almost over. The South African Revenue Services (SARS) confirmed recently that more than 2.5 million tax returns have been delivered to the South African Post Office for forwarding to taxpayers. SARS expects more than 4 million IT12S and IT12C returns to reach individual taxpayers by the end of July this year.
The reason for the delay in sending out these returns is that SARS has re-designed the forms to improve efficiencies in the submission and capture of tax returns. Both the IT12S, which "is the standard income tax return for individuals who earn a salary with basic allowances such as pension, medical and travel" and the more comprehensive IT12C "covering additional sources of income and deductions including capital gains or losses, business and rental income and farming income" will be easier to complete.
Changes to the submission process were probably motivated by the massive administrative burden linked to South Africa's ever widening tax net. SARS estimates that there were seven million registered taxpayers in South Africa at the start of the 2007/2008 tax year. These taxpayers include five million individual taxpayers, 1.7 million corporate taxpayers and approximately 300, 000 trusts. The number of registered taxpayers is expected to increase by 8% per annum for the next few years.
This means the country will have in the region of 10 million registered taxpayers by the 2010/2011 tax year.
Electronic filing now possible
SARS has expended a great deal of effort in establishing an eFiling website to further simplify the submission process. Taxpayers who so prefer, can receive, complete and submit their tax forms electronically. Users will be able to download and Adobe PDF tax return form from the SARS eFiling website from 1 August when the 2007/2008 tax filing season starts in earnest.
As mentioned earlier, SARS has been rather late in sending out the 2007/2008 tax returns. SARS believes the improved form allows for simpler and easier tax compliance and insists that the 2007 tax returns be submitted between 1 August 2007 and 31 October 2007. No extensions will be granted as was the case in the past.
Taxpayers who have not received their tax forms by 31 August 2007 have two options. The first is to download the Adobe PDF tax return from the SARS eFiling site and the second is to contact SARS either at the national call centre or at local branch level to update their mailing details and request another copy.
Pay careful attention to documentary requirements
As part of their drive to boost operational efficiencies, SARS will no longer require individual taxpayers to attach documents to their income tax returns. Thus IRP5, IT3 forms from financial services providers, receipts of medical expenses, logbooks and petrol slips will no longer have to be included when your tax return is submitted.
Of course this provision does not absolve the taxpayer from proper record keeping. Taxpayers will have to ensure that the relevant tax documents are kept in a safe place for at least five years after a particular return is filed. SARS will request documentary evidence and should they conduct and audit of taxpayer affairs.
Editor's thoughts:
There are thousands of financial advisers and tax planners who assist their clients with filing tax returns. Changes to the SARS submission process means that individual taxpayers no longer have to submit documents with their returns, but instead keep copies for a full five years in case SARS decides to audit them. Do you believe the submission of tax returns without supporting documents is a good idea? E-mail gareth@fanews.co.za
