South Africa Shows Tax Compliance Improvement

by Lorys Charalambous, Tax-News.com, Cyprus

05 December 2014

On December 4, while reviewing the preliminary outcome of the 2014 tax season, the South African Revenue Service (SARS) confirmed that there has again been consistent growth recorded in the levels of tax compliance in the country, with a total of 5.32m income tax returns submitted.

It noted that 4.05m taxpayers (almost 95 percent) who were required to submit a tax return this year, did so on time. This is more than 10 percent higher than the 3.69m returns submitted in 2013.

The total of returns submitted in 2014 (including over 1m of outstanding returns from previous years) is marginally lower than the 6.09m total for 2013, but the decrease has been put down to the introduction of a higher submission threshold since the 2013 tax year.

In 2014, the new threshold means that taxpayers earning one source of income below ZAR250,000 (USD22,335) for the year, from one employer and with no refund claims, do not have to submit a tax return, although they still contribute to personal income tax through, for example, monthly PAYE deductions by their employers.

In addition, in 2014, 99.9 percent of returns were submitted electronically, and nearly 95 percent were assessed within 3 seconds. In addition, tax refunds of ZAR15.2bn were paid to 2.1m taxpayers and SARS paid 98 percent of all those refunds within 72 hours.

Of the 1.02m outstanding returns received from previous years, defaulting taxpayers paid SARS a total of ZAR436m in outstanding penalties.

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