A simple step in the right direction

Finance Minister Trevor Manuel has announced changes that are aimed at making the 2008 personal income tax filing process even easier and quicker than last year.

In terms of the new system, employers will now have to provide information directly to the South African Revenue Service (“SARS”) that taxpayers had to complete and disclose in the past.

In explaining the changes, Pravin Gordhan, the Commissioner for SARS, said that employers would be able to use SARS’ own payroll software this year, which will involve a simplified process, as well as a form (EMP501) that will allow employers to do their own reconciliations of deductions and IRP5 forms.

SARS will also not post returns to individual taxpayers this year. Instead, a letter will be sent, asking individuals to request a tax form if they need one. Taxpayers will therefore have to determine whether they are required to request a return or not.

Taxpayers with an annual salary of less than R120 000, will not be required to request a return, provided that that they do not have more than one employer and also do not have additional income or deductions. These taxpayers will only receive an assessment afterwards.

Taxpayers that decide to request a return can request SARS for their specific return in one of the following ways:

· Contacting the SARS’ Call Centre; or
· Electronically (eFiling); or
· Completing an application form; or
· At any branch of SARS.

Taxpayers that have requested returns will only be required to complete the information that was not directly provided to SARS by their employers. As last year, taxpayers also do not have to submit supporting documentation with their tax returns.

The filing season for 2008 personal income tax returns will open on 1 September 2008 and the deadlines for manual and electronic submissions are 21 November 2009 and 23 January 2008, respectively. SARS is however encouraging taxpayers to submit their tax returns electronically.

If successful, the new system is expected to culminate in a return-free system where the majority of salaried workers will not have to file any tax returns.