• Annual Reconciliation Deadline: The South African Revenue Service (SARS) reminds employers about the upcoming deadline for the annual reconciliation declaration on May 31, 2023. Employers are encouraged to contact SARS for assistance and to submit on time to avoid penalties.
• System Enhancements for Dispute Resolution: SARS has implemented significant updates to its system to improve efficiency in resolving tax disputes. These changes include the ability for taxpayers to update contact details, expanded remission functionality, automated ‘Request for Reasons’ letters, and the introduction of automated letters for appeals administration.
• Digital Services via SARS MobiApp: SARS is modernizing its services with the SARS MobiApp, offering several online services like tax compliance status checking, profile management, tax directive services, and more. In addition, revised processes for Tax Compliance Status and new information on Deceased Estates and donation claims have been introduced.

The South African Revenue Service (SARS) reminds employers that the deadline for the annual reconciliation declaration is May 31, 2023. The Pay-As-You-Earn (PAYE) BRS for Employer Reconciliation version 22 1 0, which offers guidance for the submission, has been published. SARS encourages employers to liaise with its branches and education teams for help with any difficulties encountered during submission to ensure on-time completion.

The administrative penalty for late submission of EMP501 returns was previously explained in the February edition of Tax Practitioner Connect. Employers are advised to keep former employees’ tax records for at least five years, as required by Section 29 of the Tax Administration Act, 2011. These records will allow SARS to verify compliance with tax obligations.

SARS Enhances System to Improve Efficiency in Resolving Tax Disputes

SARS has made significant changes to improve its efficiency and effectiveness in resolving tax disputes. Taxpayers can now update their contact details for dispute purposes on eFiling, facilitating earlier engagement by SARS. They can also include the contact details of their chosen representative for the dispute resolution process.

The request for remission functionality has been expanded to include remission requests for provisional tax underestimation penalties levied under paragraph 20(1) of the Fourth Schedule to the Income Tax Act No. 58 of 1962. This change aligns the functionality with the applicable legislation.

The updated system also automates the ‘Request for Reasons’ outcome letters and the calculation of the disputed amount on submission of an appeal. If SARS requires additional substantiating documents for an objection, it can now issue up to three requests to the taxpayer.

The introduction of automated letters for appeals administration for Alternative Dispute Resolution (ADR) is another significant enhancement. SARS believes these changes will improve communication with taxpayers and help to deliver its Vision 2024.

Digital Transformation with the SARS MobiApp

SARS is modernising its systems to provide digital and streamlined online services. The SARS MobiApp now offers several 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, users can report a new estate case and chat with a SARS service agent via the live chat functionality called Lwazi.

Revised Processes for Tax Compliance Status

The processes governing the Tax Compliance Status have been revised. Taxpayers can now apply for ‘Good Standing’ and ‘Approval of International Transfer (AIT)’. The latter allows taxpayers to apply to transfer funds internationally, aligning with the SA Reserve Bank (SARB) exchange control changes regarding Emigration. The updated guide offers detailed information on how to remedy non-compliance, challenge a Tax Compliance Status, and the importance of merging all tax products before applying for a Tax Compliance Status.

Updated Information on Deceased Estates and Claiming Donations

SARS has posted updated information on Deceased Estates. It also advises donors to include specific information on a receipt issued under section 18A(2)(a)(vii) of the Income Tax Act. The receipt should state the nature of the person who made the donation, their identification type, number, income tax reference number, contact number, email address, a unique receipt number, and their trading name if it differs from the registered name.