The South African Revenue Service (Sars) has requested the country’s four major commercial banks to introduce a payment validation system on each of their electronic banking applications to prevent incorrect electronic tax payments.
Sars said in an announcement on Wednesday it has reached an agreement with First National Bank, Absa, Standard Bank and Nedbank to introduce the new measures in a phased approach, with First National Bank the first to begin in April.
The new validation system will ensure that all taxpayers submitting payments via electronic banking are prompted to enter the correct payment information regarding their identity (taxpayer reference number), the tax product being paid, and the period or return to which such payment should be allocated. This information is contained in a unique 19-digit reference number.
Although the taxpayer’s identity and the tax type remain unchanged for a specific tax, the period to which the payment should be allocated changes constantly. This variable is the primary cause of most payment reconciliation difficulties, which frequently lead to aggravation for taxpayers and frustration for Sars officials.
Unlike eFiling, not all electronic payments to Sars are validated prior to payment, with the result that taxpayer payment details are not always submitted correctly. The validation system will prevent incorrectly referenced payments by rejecting those that do not conform to the correct guidelines, bringing internet and other electronic banking channels in line with over-the-counter payments and payments via eFiling.
Sars said the validation initiative forms part of an extensive and ongoing exercise to improve and streamline Sars’s service to ensure it is accessible, easy to use, reliable, secure, accurate and cost-effective.
Sars has, over time, developed a number of channels to facilitate the payment of tax and to make things easier and safer.
These collection channels include payments via eFiling, electronic payments, payments at any FNB branch and payments at a Sars branch office.
eFiling remains Sars’s preferred payment channel, the group added.
“This payment mechanism provides many advantages to taxpayers and prevents incorrect payment referencing. Although this facility is limited to only certain financial institutions, it is our intention to expand this solution to all financial institutions with the assistance of the four major commercial banks. The eFiling solution is also being extended to cater for ad hoc transactions on any tax type.” — I-Net Bridge