Making it easier to pay taxes
The South African Revenue Services (SARS) had approximately seven million registered taxpayers at the start of the 2007/2008 tax year. According to an official SARS media release there are some five million individual taxpayers, 1.7 million corporate taxp
Every year these legal entities receive an intimidating stack of papers in the mail. The dreaded annual gift from SARS comes in the form of a bulky tax return and the relevant manuals that instruct the taxpayer on how to complete the forms. In line with SARS attempt to streamline the revenue collection process the 2006/2007 tax forms have undergone a significant overhaul. The changes were announced on 9 May 2007.
Greater efficiency and faster turnarounds
The key objective of the simplified Income Tax return is to make it easier for individual and corporate taxpayers to submit their tax returns. Re-modelled tax forms help to achieve this goal by improving efficiencies and turnaround times.
In the past, taxpayers used to wait months before receiving the outcome of their annual tax assessment. The one-sided process saw SARS pressuring taxpayers to submit returns by the end of July each year, after which these taxpayers waited in limbo before finding out if they were to receive a refund, or were expected to pay more tax.
It makes sense that simpler return processes will result in quicker evaluations and quicker cash flows. We wish more of South Africas regulatory institutions would strive for greater efficiencies. The 2006 World Competitiveness Yearbook, a project completed by the IMD business school, ranks SA at 50th out of 55 economies. Contributing factors are high unemployment, societal and legislative problems and poor infrastructure. A SARS-like approach from government and industry would go a long way to improving this ranking in future.
Deadline extended this year
The good news for taxpayers is that the changes to the Income Tax forms will result in some additional time to submit them. Individual taxpayers will receive their tax returns by the end of July this year, and will have to submit these returns by the end of October. Business taxpayers should receive their returns by September. Companies will have to submit these returns between six and twelve months after their year ends.
The new efficiencies also bring some bad tidings. There will not be any extensions for taxpayers this year. You will have to submit your return by 31 October. No more applications for late submission will be tolerated because the forms are that simple to complete.
One of the changes to the submission process is that SARS will no longer require individual taxpayers to attach documents to their income tax returns. IRP5, IT3 forms from financial services providers, receipts of medical expenses, logbooks and petrol slips will no longer have to be included when the return is submitted.
Be warned though, this does not mean the documents are no longer required. Taxpayers will have to ensure that these documents are kept for at least five years after the return is filed. The documents can be requested by SARS and will have to be produced in the event of SARS conducting an audit of taxpayer affairs.
Taking the pain out of tax
SARS will focus on a number of technological improvements to facilitate the tax filing process. Apart from the redesign of forms already mentioned, SARS will also improve the e-Fling system. Taxpayers using the Internet to file returns should benefit from even quicker turnaround times and will be able to file electronic objections to tax assessments online.
Nobody likes paying over their hard earned cash to the taxman. To a great degree, the process is invisible as the money disappears from the final paycheque by way of various salary deductions.
Taxpayers are used to the pain associated with completing the annual tax return. We will miss the old, cumbersome process- because parting with one's hard earned cash should carry an element of pain. If SARS simplifies the process, parting with our money might become too painless- and that can never be a good thing!
Editor's thoughts:
Love them or hate them, SARS continues to improve the service afforded taxpayers. If local municipalities could take a page out of SARS's book, account payment frustrations would be a thing of the past. Do you approve of the latest changes to the tax collection process? Send your comments to [email protected].
