The deadline to submit your annual income tax returns has passed. Whether you missed this deadline, or you were a bit unprepared for your last submission, it is a good time to start planning for the 1 March 2021 to 28 February 2022 tax year. Not only will you be prepared when time comes to submit your returns, but you will make informed decisions leading up to the big day.
Khumoetsile Matlhajwa
Tax Consultant
The Income Tax Act No. 58 of 1962 (“ITA”) states that individuals are required to register as taxpayers for personal income tax when they earn income above the required threshold. Registered taxpayers are obliged to submit their tax returns to ensure overall compliance. The tax year for individual taxpayers fall on the last day of February (taxed on a progressive tax table). Submissions can be done through the e-filing system or at a SARS branch, though Covid-19 protocols has made the online process more favourable. In instances where tax returns are due for submission, SARS may levy a penalty for non-submission.
It’s advisable for taxpayers to contact tax practitioners for assistance in declaring the correct information when submitting tax returns. SARS e-filing allows all profiles linked to a common ID/passport number to appear under a single profile (i.e. personal and company information).
Does SARS require substantiating documents when filing annual returns?
According to section 29 of the Tax Administration Act, No. 28 of 2011, taxpayers are required to keep records for up to 5 tax periods because the onus of proof always rests upon them when information is requested by SARS.
Taxpayers are often puzzled by the documents required by SARS based on the information declared on their tax returns. During the COVID-19 pandemic, employers allowed employees to work from home, which resulted in queries about relevant deductions or allowances.
SARS Assessments
When a taxpayer submits a tax return, SARS issues an Original Assessment. In instances where SARS is querying the information declared on the tax return submitted or when you have submitted a correction, an Additional Assessment will be issued. If you are aggrieved by either your Original or Additional Assessment, you are allowed 21 business to file an objection from the date of assessment.
To avoid the likelihood of assessments and to ensure a first-time accurate submission to SARS, it is best to rope in the services of a tax professional. They will be able to guide you towards SARS compliance and point out all the pitfalls before it is too late.
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