Taxpayers will have until October 31 to submit their returns this year using a new, much easier system, Finance Minister Trevor Manuel announced in Johannesburg on Wednesday.
The South African Revenue Service (Sars) has not only cut down on the number of tax returns, but has significantly simplified them — particularly the two for individual tax.
”I might even chance my hand at this one myself,” Manuel told major company chief and senior executives and Sars general and senior managers, joking that the new system might put his tax consultant out of business.
The new forms for individual tax are the two-page IT12S (for simple), for the 3,5-million taxpayers earning basic income and standard allowances, and the five-page IT12C (for complex), for those earning additional income.
Taxpayers will also no longer have to attach supporting documentation — such as IRP5s, IT3s, bank statements, medical receipts, logbooks and petrol slips.
However, they will have to make use of the information in these documents in their returns and keep them for five years in case Sars decides to audit them.
Sars has an estimated half-a-billion pieces of paper in its 90 offices, said Sars commissioner Pravin Gordhan.
”Some floors were beginning to crack because of the weight of the paper,” he said.
Under the new system, taxpayers will not have to do any calculations either. While they will be told how to do the maths, that responsibility will rest with Sars.
However, returns will be sent back to taxpayers who have not signed them or completed them incorrectly — placing them at risk of penalties of up to R300 for late submission.
”We’re going to end up with a situation that is substantially easier,” said Manuel.
So easy, in fact, ”you won’t even need a manual”, a SARS advertisement in its massive education campaign for the new system says.
The number of registered taxpayers increased from 2,7-million in 1997 to 4,8-million in 2003 and to nearly 7-million in 2007. This is expected to grow to 10,5-million by 2010.
The amount of revenue collected rose from R165,3-billion in 1997/98 to R495-billion in 2006/07.
”If you grow at this kind of rate, the scale of administrative burden is enormous … the scale of it is just quite impossible,” said Manuel.
The new system is designed to make filing easy for compliant taxpayers and free up the hands and heads of Sars staff for those who do not want to comply, he said.
The non-compliant will be detected through layers of controls, including the cross-referencing of their information with that which institutions such as employers and banks provide to Sars.
Returns will be posted to taxpayers from mid-July. They will also be available on the Sars e-filing website, from employers and at Sars offices.
No extensions will granted — other than to e-filers, as an incentive. They will be given until January 31 to submit, said Gordhan.
He said 30 000 taxpayers filed electronically last year, but that was when only simple tax returns could be filed electronically. This year, e-filing will apply to all returns.
Sars is trying to get taxpayers to ”shift to the e-side”.
Even if they do not, Sars expects that the system will ensure greater efficiency and improved turnaround times in the capturing, verification and assessment of taxpayer information.
While it will also mean quicker refunds, payments will no longer be made by cheque, but electronically, directly into bank accounts.
Sars said this is the start of a three-to-five year bigger strategic programme, which will include changes to the returns for companies, trusts and exempt institutions. — Sapa