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SARS Extends Employer Tax Filing Deadline

by Robert Lee, Tax-News.com, London

01 September 2008


The South African Revenue Service (SARS) will grant a reprieve to employers and businesses in the country by allowing more time for them to submit payroll information without facing penalties.

The deadline for employers to submit PAYE reconciliation declarations (an EMP501 form) to SARS, as well as the tax certificates (like an IRP5 form), on behalf of their employees was the close of business on August 29, 2008. The result of failing to do so would have been strict penalties SARS could have imposed against defaulting employers.

By Friday’s deadline 130,000 employers had submitted payroll declarations together with 10 million tax certificates of their employees. This will enable SARS to start preparing a unique, customised “pre-populated” income tax return for the first time for millions of individual taxpayers.

However, SARS has decided to grant employers more time, until September 12, 2008, to submit EMP501 declarations.

In a statement announcing the deadline extension, SARS acknowledged that the the new payroll reconciliation process and software introduced this year has required substantial change from businesses, payroll administrators, tax practitioners and, indeed the tax collector itself.

"Businesses have gone to great lengths to comply and many smaller businesses especially, have struggled to meet their obligations on time," SARS stated on Friday.

"As a result a number of businesses, some business organisations and tax practitioners who want to comply have asked for more time," the revenue service added.

According to SARS, last Friday (the original deadline day), its call centre fielded more than 40,000 calls, while more than 26,000 employers submitted their declarations.

SARS singled out the "remarkable response" to the new initiative of government institutions, collectively the largest employer in South Africa, with 1.1 million employees.

However, SARS has expressed some concern over the accuracy of information received on the declarations, and the tax collector said that it is working with employers, the Department of Home Affairs and other sources to clean up the data. It conceded that this is a process that "will take time."


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