SARS appoints employers to collect outstanding submissions, penalties

South African Revenue Services (SARS) has personal taxpayers with outstanding returns and penalties firmly in its sights with the introduction of the ITA88 “Agent Appointment” notification that will appoint companies to electronically collect outstanding penalties from employees and pay the amounts over to SARS.

There are many taxpayers with long outstanding tax returns who now owe administrative penalties for failure to submit personal income tax returns.

Grant Lloyd, managing director of payroll and HR software specialist Softline Pastel Payroll, said the ITA88 will enable SARS to monthly appoint, via its e@syFile software system, the employers of defaulting taxpayers to deduct the overdue amounts incurred through late or non-submission of penalties.

On receipt of the ITA88 Agent Appointment notice, the employer is obligated to deduct the stipulated amount from the salaries or wages of the respective employees. The employer will then have to pay the amount over to SARS by the due date as indicated on the ITA88 form. If the employer is unable to execute the request, the employer must provide feedback to SARS via e@syFile, by contacting the SARS contact centre or by visiting a SARS branch.

“Companies with automated payroll software will be able to easily manage the collection and payment process. With an automated payroll solution, companies can simply import a file from the e@syFile system into the automated payroll system to load the ITA88 deductions per employee against the defaulting employee’s salary,” said Lloyd.

This will allow companies to monitor the short and long term affordability of an employee to pay the outstanding monetary amount.

From a short term affordability point of view, the employer indicates that the taxpayer (employee) won’t be able to afford the full amount requested and the employer is permitted to reject the ITA88 appointment. All active ITA88 transactions against the specific taxpayer (employee) will be cancelled and replaced by a new ITA88 transaction allowing three equal monthly instalments.

In addition, employers need to ensure that the employees listed in the Agent Appointment Notice are still in the company’s employ.

The information that is captured on the payroll system can be exported into the e@syFile system eliminating manual recapturing on the e@syFile system. The comments that were made on the payroll system will now reflect on the e@syFile system.

Ettiene Retief, a tax and corporate law specialist at FTR Tax and Corporate Administration, who also runs tax, payroll, accounting and legislative (ITA88) seminars for Softline Pastel, said there are many individuals who have outstanding tax returns over two, three and more years.

“Raising the penalties was pretty much ineffectual as the tax was not being collected. The ITA88 form is the result of certain individuals having forced SARS’s hand by ignoring the process for too long. Now the appointment of employers as agents will result in outstanding tax being efficiently collected and it will encourage defaulters to get their tax affairs in order.

“SARS now also offers a range of services designed to help taxpayers get their returns done quickly and easily with the minimum of fuss. Efficient tax collection is in everyone’s best interests and the ITA88 system will be beneficial to the country as a whole.”