As a South African taxpayer, you might have heard that SARS is selecting certain individuals for an annual “auto-assessed” tax return again this year. With as many as 3 million taxpayers lined up to receive the option via SMS, we thought this might be worth exploring, just in case you see an unexpected text message in your smartphone inbox feed.
As a South African taxpayer, you might have heard that SARS is selecting certain individuals for an annual “auto-assessed” tax return again this year. With as many as 3 million taxpayers lined up to receive the option via SMS, we thought this might be worth exploring, just in case you see an unexpected text message in your smartphone inbox feed.
So, what are we talking about?
In years gone by, in order to file your tax return, you could only do so in one of two ways:
- Online via the SARS e-filing platform or
- By walking into a SARS office and physically completing a return (paper-based)
SARS is incentivised to make sure that all taxpayers file their tax returns and that they collect as much money as possible. If you were in the business of collecting taxes, maybe you’d consider doing the annual return for your taxpayers (at least the uncomplicated ones) and take the ‘inconvenience’ factor right off the table for them?
SARS has thought about how they can make it easier for busy South Africans to file their tax returns, and the easiest solution they came up with is to do the assessment for them and get the taxpayer to simply accept the outcome.
Think about it for a second…
A tax return consists of an IRP5, which is a document you get from your employer, stating how much monthly tax (PAYE) they have paid over to SARS in the financial year ending February each year. It might also include tax certificates from your bank and investment companies, as well as legitimate deductions such as those for your medical aid and retirement contributions.
For most of us, it’s not an overly complicated calculation, but it’s a real hack trying to get all the documents together and then finding the time to login to the SARS e-filing platform to file the return accurately.
The solution? Auto assessments.
SARS rolled out auto-assessments last year and this is how they work:
SARS collects all the info they need for your annual tax return directly from your employer and any third-party financial institutions like retirement funds and medical aid schemes. They then use this information to prepopulate your return. Now, we don’t know exactly how they decide which individuals to target for the auto-assessment offering, but you’d think that it has to be based on the simple fact that most of those people would accept it.
It would be a futile exercise to send out 3 million SMS messages, asking people to accept their return immediately, if SARS wasn’t confident the majority of those people would agree to the assessment. They would also have to be sure that the vast majority of those taxpayers wouldn’t be able to provide any further evidence to dispute the assessed return.
The message from SARS will be along the lines of:
Look we’ve got all the information we need from your employer, bank, medical scheme and retirement fund. We’ve saved you the hassle of getting all of this done yourself, so here is your return to review and please accept if you are happy with our calculation.
And that’s cool because if it’s right it’s right. But if it isn’t correct, you also have the option to not accept the auto assessed amount. So, take your time and run through your assessment to make sure that all the recorded data is correct before submitting your return.
Remember, you get one chance. Once you have accepted the return, there is no turning back.
Have you received any SMS notifications from SARS over the past few weeks?
We would love to hear your comments below.
Until next time.
The Wise About Life Team
