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SARS Redesigns Tax Filing Process

by Robert Lee,, London

11 May 2007

The South African Revenue Service (SARS) has announced significant changes to how South African taxpayers submit their income tax returns.

SARS says that the new, simplified submission process and the redesigned income tax return will make it considerably easier for individual and business taxpayers to complete and file their returns. At the same time it is intended ensure greater efficiency and faster turn-around times with regard to SARS’ internal processes in capturing, verifying and assessing the information submitted by taxpayers.

The tax department said that the new system will require "behavioural changes" among registered taxpayers who have become accustomed to a filing process with a single annual deadline for submissions in July.

The government is introducing the changes because of an ongoing widening of the South African tax base which has caused the tax register to grow year-on-year by between 8% and 12%.

The number of returns that need to be assessed every year has reached unprecedented volumes, SARS said, and will continue to grow at around 8% per year over the next 3-5 years.

"This volume growth places a tremendous strain on the current capacity and is challenging the service level promised in the SARS Service Charter," the Department stated.

According to SARS, the changes represent "the beginning of an exciting new journey" in the interaction between the Service and some 7 million registered taxpayers, made up of 5 million individuals, 1.7 million companies and 300 000 trusts. The new submission process introduces the increased use of new information technology that should result in a less burdensome filing experience to taxpayers. As a result, this year taxpayers will not be required to include any supporting documents – IRP5, IT3 forms from financial services providers, receipts of medical expenses, logbooks or petrol slips – to their income tax returns. However, taxpayers must ensure that they keep such supporting documents for a period of five years.

Under the new system, individuals will receive returns by the middle of July. Deadline for submissions for individuals will be 31 October 2007. Companies will receive returns in September 2007. The deadline for submissions for companies will be 6 to 12 months after their financial year.

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