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Tax Services

SARS Improving Tax Services

The SARS auto-assessment system has been designed to streamline their tax services and the annual returns filing process. This system generates a pre-calculated tax return based on information gathered from your employer, bank, and other financial institutions supplying taxation information directly to SARS.

Despite the ease this automatic process aims to provide, taxpayers have been experiencing a few bumps in the road and have been warned to remember that they are solely responsible for the accuracy of the information used. Therefore, it is crucial that taxpayers flag incorrect auto-assessments and provide accurate information through a manual income tax submission.

Checking Your Assessment

Taxpayers are responsible for providing SARS with a complete and accurate declaration of their income and deductions. If you have been incorrectly refunded through an auto-assessment, you will be required to return those funds. Additionally, you are liable for any additional tax owed. Taxpayers who have received an inaccurate auto-assessment have until the end of October 2023 to submit the correct return via eFiling. In the event that you correct an auto-assessment, SARS may choose to verify your information, requiring you to upload supporting documents on eFiling.

Why Are Some Auto-Assessments Incorrect?

SARS does not have all relevant tax certificates.

The taxpayer earns a freelance income not identified through an IRP5.

The taxpayer earns income from a rental property.

The taxpayer earns income from a foreign company that does not issue an IRP5.

The taxpayer has earned income from capital gains on foreign investment.

The taxpayer has medical expenses that can be claimed as a deduction.

The taxpayer has travel expenses that can be claimed as a deduction.

The taxpayer has home office expenses that can be claimed as a deduction.

The taxpayer has made tax deductible donations.

The Expected Penalties for Non-Compliance

It is crucial to rectify any auto-assessment errors promptly and submit your return on time. SARS has emphasised the enforcement of strict and costly consequences for non-compliance with tax obligations, resulting in severe penalties. The Tax Administration Act was amended as of December 2022, introducing penalties for individuals with even a single outstanding tax return. In the first five months of this year alone, SARS imposed penalties totalling R380 million on nearly 700,000 taxpayers. The penalty for late submission, including delayed correction of an auto-assessment, varies from R250 to R16,000 per month, depending on the tax amount owed, and can be imposed for up to 35 months. Additionally, interest may be charged on any outstanding tax amounts.

Ensure Compliance with Professional Assistance
MMS Group provides professional tax services to assist our clients in their compliance with SARS regulations. Our team of skilled professionals understand the complexities of tax returns and can help you navigate them effectively. Whether you are dealing with an incorrect auto-assessment or a complex income structure, we can guide you to ensure you are SARS compliant. Reach out to our team today.

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