Tax return submission date looms

For those of you who elected to file electronic tax returns for the 2007 tax year the submission deadline is a mere nine working days from today. SARS has urged all taxpayers not to leave their online submission to the last minute, as the website is likely to be extremely busy the closer we get to 31 January 2008.

In the meantime SARS is struggling through a record number of individual tax returns. Earlier this year SARS published an update on the 2007 filing season, claiming a record of individual income tax returns for the period. A total of 3 million assessments were received and are being processed. By early January a total of 2.185 million (71% of the total) had been reviewed. SARS announced that 1.650 million of these had been assessed and taxpayers refunded (in the event a refund was due) or advised to make up shortfalls. A further 884 000 returns were in process while 242 000 returns contained information that did not match existing SARS information and were being investigated.

But many forms are simply not forthcoming

Despite the record assessment year, SARS estimates as many as six million returns (over a period of a number of years) are still outstanding. Estimates are that 23 500 repeat offenders account for 500 000 of these forms.

Many South Africans resist filing their income tax returns. SARS enforcement General Manager, Jonas Makwakwa told reporters in Durban last year that the problem was particularly evident in KwaZulu-Natal. A survey conducted in the province revealed a “lack of understanding as to why [people] should pay tax. The second thing [that emerged is that people] did not believe [they] were getting a service for their money.” The attitude was simply that since individuals were not receiving services from government, they believed they should not have to pay tax.

Unfortunately the government expects their slice of your income whether you are happy with the service delivery in your area or not. And that is why Afriforum’s recent call to businesses to withhold tax in the wake of government (and Eskom’s) failure to provide electricity will probably fall on deaf ears.

Massive number of errors

What concerns FAnews Online is the massive number of forms which were returned to taxpayers as incomplete or unsigned. SARS reports that 385 000 forms have been returned for a variety of reasons. It seems absurd that SARS could reject more than 10% of the total number of received returns.

Financial advisers report that reasons for rejected returns include not submitting your vehicle registration number, inserting a ‘zero’ or “N/A” in a field that should have been blank or not signing the return.

Taxpayers who submitted their completed returns prior to the 31 October 2007 deadline who have not heard from SARS fall into one of two categories. Either your form has been received buy not yet assessed, or SARS is investigating discrepancies between your submission and their records. Either way, SARS advises that if you have not received any response by 31 March this year, you contact them for further information.

Unhappy with the assessment

In the event you have received your IT34 form and are unhappy with the SARS assessment there are two options available to you. Either you file a ‘Request for Correction’ or you file a ‘Notice of Objection’. SARS has simplified these processes for the 2007 tax year.

A request for correction is “used if you made an error or omission on your return or if you believe SARS has captured your information incorrectly. It’s only one page and you don’t have to send in any supporting documents.” The relevant form is the IT12S. SARS will issue a revised assessment as soon as the information is corrected.

The objection form is used “when your information has been captured correctly, but you disagree with the assessment.” All you have to do is advise SARS why you believe their assessment is incorrect and they will subsequently evaluate the objection. The form to use for objections is the IT12C. Once this form is processed you will either receive a revised IT34 or be advised that the objection is refused. You are then free to follow the SARS dispute resolution process.

Editor’s thoughts:
Although SARS claims that everything is running smoothly, tax advisers responsible for submitting returns have two major complaints. The first is that forms are being rejected if they contain the tiniest error – and the second that SARS’s helpdesk staff cannot provide reasons for a form’s rejection. Have you experienced problems dealing with SARS in the New Year? Add you comment below or send them to gareth@fanews.co.za