In light of the recent announcement that the tax return threshold will be lifted from R350,000 to R500,000, it is crucial for South Africans to fully educate themselves on their filing obligations, or risk incurring possible fines by the South African Revenue service (SARS).
This is according to Tertius Troost, Tax Manager at Mazars, following SARS Commissioner, Edward Kieswetter’s update on his first month in office. In particular, Troost points out that it is important to understand that the revised tax return threshold announced by Kieswetter, is only one of the requirements when deciding whether or not to submit a tax return. The final details of the conditions to meet in order not to be required to submit tax returns will be published in a Public Notice within the next few weeks.
“We believe that it is very important to make it clear that taxpayers who earn extra income from side-businesses or a second employer, or who receive fringe benefits or allowances, or money from investments (above certain thresholds) or rental income, still have to file returns – even if they earn less than R500 000 per year. This is one example that shows why it is so important for all taxpayers to make a point of educating themselves on every one of their possible obligations before filing their tax returns.”
Troost notes that the raising of the returns threshold, as well as the fact that SARS is actively encouraging more individuals to make use of e-filing, is a clear sign of SARS’ renewed efforts to become more efficient and effective. “Requiring fewer people to file, and driving more taxpayers towards using automated services such as e-filing, can help to free up resources and reduce the cost of admin for SARS. This will ultimately make a huge difference in making the service more effective.”
With that said, one other important development has raised a significant concern regarding SARS. “It was revealed to the South African public last week that gross domestic product had contracted by 3.2% over the first quarter of this year. This is unsettling because it raises the question of whether SARS will still be able to achieve the R1.422 trillion revenue collection target that it set for 2020 – and by how much this target may have to be revised later in this year,” Troost concludes.