• The South African Revenue Service (SARS) reminds employers of the fast-approaching deadline for the annual Employer Reconciliation Declaration, which is on 31 May 2023. Employers failing to meet this deadline will face administrative penalties, calculated based on their liability over a 12-month period.
• SARS has unveiled numerous system enhancements designed to improve efficiency and effectiveness in resolving tax disputes. These updates include features for updating taxpayer contacts, automated outcome letters, and an extended request for remission functionality.
• To modernize its services, SARS has launched the SARS MobiApp, offering a range of services like tax compliance status service, profile management services, and tax reference number request service. Additionally, the tax compliance status process has been amended to align more closely with the SA Reserve Bank’s exchange control changes.

The South African Revenue Service (SARS) has issued a reminder to employers that the deadline for the annual Employer Reconciliation Declaration is approaching fast, closing on 31 May 2023. Alongside this, the tax authority has made significant updates to its systems aimed at improving efficiency and efficacy in resolving tax disputes.

The Pay-As-You-Earn (PAYE) BRS for Employer Reconciliation version 22 1 0 has been published, providing information to aid employers in the submission of the declaration. The SARS encourages employers to cooperate with its branches and education teams to resolve any difficulties they may encounter in ensuring timely submissions.

Failing to submit an EMP501 reconciliation declaration on time will result in administrative penalties for PAYE. The penalties will be implemented in 1% increments over 10 months from June 2021 for the reconciliation ending 28/29 February 2021, and for subsequent years. The maximum penalty that can be levied if the reconciliation is not submitted during this period is 10%.

The penalties will be calculated based on the employer’s liability over a 12-month period. If less than twelve EMP201s were submitted, the system will calculate the average of submitted EMP201s and multiply by twelve to determine an estimated total aggregate employee liability for the year. However, the penalties will only be imposed if a full month has passed without the reconciliation being submitted.

The SARS has also reminded employers of their obligation to keep former employees’ tax records for at least five years, in accordance with Section 29 of the Tax Administration Act, 2011.

The SARS has made several system enhancements to improve the process of resolving tax disputes. Notable changes include updated taxpayer contact features, extended request for remission functionality, automated ‘Request for Reasons’ outcome letters, and the ability to issue up to three requests for additional substantiating documents during the objections phase of a tax dispute. Furthermore, the calculation of the disputed amount will now be automated on submission of an appeal.

Digital platforms and technology infrastructure play a crucial role in the delivery of SARS’ Vision 2024. The tax authority believes these enhancements will improve communication with taxpayers, providing clarity and certainty, and making it easier for taxpayers and traders to comply with their obligations.

The SARS has also developed the SARS MobiApp, part of its strategic objectives to modernise systems and provide digital and streamlined online services. The app offers various services, including tax compliance status service, profile management services, tax directive service, tax reference number request service, and locations of SARS branches and appointment services.

Additionally, the tax compliance status process has been amended, including the introduction of a new dynamic application called ‘Approval International Transfer (AIT)’, which replaces the existing ‘Emigration’ and ‘Foreign Investment Allowance (FIA)’ application types. This new process further strengthens the legislative alignment with the SA Reserve Bank (SARB) exchange control changes as it pertains to Emigration.

As the deadline approaches, employers are encouraged to utilize these resources and ensure they meet their tax obligations in a timely manner.