Tag Archives: SARS

SARS – touching lives negatively

Just received a revised assessment from SARS for a client for the 2014 tax year, disallowing her retirement annuity contribution and thus resulting in a revised assessment and penalties!!!

On what planet does SARS get to disallow an RA contribution? Do they now get to make up their own rules? Are they so desperate for money that they are now issuing frivolous penalty assessments to scare clients into paying to improve SARS’ cash-flow?

This is insane and amounts to victimization by SARS. It’s definitely not in keeping with SARS’ charter of treating tax payers fairly.

Yes, we will lodge a dispute and it will be over-turned but this is such a waste of time and money and just further serves to erode the public trust in SARS that is already in free-fall.

Come on SARS, you can do better – you are touching lives negatively

Bad design – come on SARS

At first I thought that maybe it was only me and that the settings on my computer must be faulty – turns out it’s not me. It’s everyone who uses efiling…

While there are many positives about efiling, can someone please look at the system from a design point of view…the page does not fit on the average screen and most frustratingly, it does not scroll down.

Also, why do I have to re-enter my practitioner information each time – why cant this pull through automatically? It just adds to the costs for tax payers.

Surely this is basic design stuff – or does no one at SARS care?

 

 

 

 

Remove all sharp objects…

I attended a presentation by one of the SA asset managers recently…it was a good job that there were no sharp knives around. It was real slit-your-wrists stuff!

Their view is that SA is pretty much stuffed and that unless there is a significant change in ANC leadership that we are on the “low road” scenario. The reasoning is as follows:

  • SA stuck is in a no growth-low inflation scenario. The only reason the Reserve bank is not cutting interest rates is due to political risk fallout.
  • The global search for yield has kept the ZAR strong (for now) – they see it considerably weaker over 3 years, especially if we get the Moodys’ downgrade on local debt (it seems inevitable at this stage).
  • SA consumers are very stressed with much higher than normal variance in the payday compared to mid-month purchasing patterns (there is a massive spike at pay-day compared to mid month and this is much higher than normal). In addition to this, people are switching away from brand names to “no-name” products.
  • SA food retailers have noted significant change in the composition of the average food basket – food inflation as measured by retailers is very different compared to what is measured by Stats SA.
  • One of the SA retailers reported that for every R100 they are lending consumers, there is an additional R1700 in unsecured credit! Unsecured credit demand has increased radically.
  • Another SA retailer has reported worst figures in 20 years.
  • There are 17million people on social grants and this number is increasing rapidly…government is running out of money to fund this.
  • SA facing poor consumer confidence (reduced spending), poor business confidence (reduced investment in SA) and poor employment numbers.
  • The revenue (tax) base is shrinking, SARS is missing money due to incompetence.
  • SARS (and treasury) have been haemorrhaging skills and there is a significant loss of expertise at both organisations.
  • Tax payer non-compliance has increased as a result (and will continue to increase) thus worsening government revenue.
  • Government is going to be desperately short of funds!
  • The risk of a return to “prescribed assets” for pension funds has increased and along with this a limit on moving funds offshore and possible cancelling of asset swap capacity for local funds!

 

It’s a good job that there were no sharp knives around…having said this though, they are still positive medium-to-long term IF the Zuma faction is outed from government.

This cant be good?

I know I am banging on a bit about SARS and tax at the moment but it is probably because for me it is the period when we have the most interaction with SARS – not only are we in the throes of the 2010 filing season but the 2011 first provisional tax deadline is also around the corner.

In this context I recently had the misfortune of having to go into the SARS Cape Town branch to take in an application to register a new tax payer for the first time. Why this cant be done online or via email is beyond me but SARS insist on original bank statements and certified copies of identity documents and there is no guarantee that the post will get to them (even registered mail) and so it means a trip to their offices.

Armed with the necesary I stood in the queue to get into the building…once inside I was directed to another queue so that I could hand in the forms and get a stamped copy so that I have proof that the application was indeed submitted (this is a necessary strategy anytime you take in any documents to SARS and we have been “saved” a number of times when we have been able to provide a stamped and dated copy of a document that they claimed never to have received).

I eventually got to the front of the queue to do what was the “right thing” and managed to get my copy stamped by a less than friendly official. During the whole experience I was overwhelmed by two familiar but very unwelcome emotions:

  1. I felt like I was in the headmaster’s office back at school waiting to be punished by the overly strict, mean principle (yet I was sure that I was not in the wrong in any way).
  2. The second emotion was even less welcome and took me back to the dark days of conscription…all of a sudden I was back in infantry school doing basics where my life was not my own but rather in the hands of the state who had the power (and authority) to essentially do with it as they pleased.

Now maybe I am a bit strange and maybe I have issues with SARS but when you are “doing the right thing” and also helping others to “do the right thing” (and when you know the system) and this is the over-riding feeling that comes from dealing and interacting with it, then something must be seriously wrong!

SARS offices are not the friendliest of places and most people that I know would sooner go to the dentist than to SARS…but if SARS is intent on making income tax submissions more simple so that more people can do their own returns either on efiling or by visiting a SARS branch then I suggest that they need some serious lessons in public relations and on how to deal with the public. We are, afterall, their customers and we are the people that ulimately keep them in business. Without us, SARS would not exist so perhaps it is time for a bit of an attitude change by SARS employees to the general public and more importantly, to the people who are trying to do the right thing by getting their tax affairs in order.

Provisional tax returns – to submit or not to submit?

There seems to be quite a bit of confusion around provisional tax this year and more importantly who is liable to submit a return. SARS have adopted a new approach and are not automatically sending out returns any more and are rather leaving it up to tax payers to request the forms from SARS.

In spite of this we have still received almost 70 emails notifying tax payers that they are liable to submit a provisional tax return – and the letters are confusing too becuase they make reference to the fact that according to SARS, the tax payer is a provisional tax payer and thus liable to submit a return. Although, it also says “You do not need to submit an IRP6 return if you are no longer liable for Provisional Tax. However, you may be charged interest and/or a penalty for non-submission of your IRP6 return if at the time of assessment it is determined that you were liable as a provisional taxpayer”. Little wonder that there is such confusion!

So what do the rules say – just who is a provisional tax payer?

With reference to the definition of a provisional taxpayer in Paragraph 1 of the Fourth Schedule of the Income Tax Act No.58 of 1962, a provisional taxpayer is:
• Any person (other than a company) who derives income, other than remuneration or an allowance or advance as contemplated in section 8(1).
• Any company excluding public benefit organisations and recreational clubs.
• Any person who is notified by the Commissioner that he is a provisional taxpayer (this is an important clause).

The rules then go on to say the following:

The following persons / natural persons are not required to pay provisional tax:

Individuals below the age of 65 who do not carry on a business and whose taxable income:

  • will not exceed the tax threshold for the tax year; or
  • from interest, dividends and rental will be R20 000 or less for the tax year.

Individuals age 65 and older if their annual taxable income:

  • consists exclusively of remuneration, interest, dividends or rent from the lease of fixed property; and
  • is R120 000 or less for the tax year.

So that’s what the rules say…but then there is that sneaky clause that says that “any person who is notified by the Commissioner that he is a provisional taxpayer” is liable to submit a return. So does the letter mentioned above constitute “being notified” or not?

So my advice is that if you think you might be liable, or you were in the past but now could be exempt in terms of the above rules, then phone the call centre 0860 121218 and ask SARS. Just make sure that you get the name of the call centre agent, the time and date of the call and most importantly, make sure you get a reference/case number for the call. And if you are still not sure, then err on the safe side and submit a nil return (it is a really simple and relatively quick process).

If you need to submit a return, you have 26 days to go…

SARS – just like Alice

I had to make a trip to SARS in Cape Town this am to hand in the 6 paper provisional tax returns that I cant get on efiling – this is despite several email and telephonic requests to SARS to get them on e-filing.

As I arrived there I was greeted by the site in the picture below…

this is a many-hour queue (and it has been like this since November last year according to the SARS lady that helped me). Fortunately, I did not have to stand in line as I just needed to hand in docs and get stamped copies.

The whole exercise has got me thinking about SARS and e-filing and just how much like Alice SARS is…

For those of you who dont remember Alice (it is not a reference to the song) but rather to the little girl with the bump in the middle of her forehead. When she was good she was very good but when she was bad she was horrid!

And so it is with SARS and e-filing – when it is good it is excellent, but when it goes wrong it is awful! It is hard to argue or reason with a computer and even more so with a disinterested clerk at the other side of the call-centre telephone line.

Despite this though, e-filing is on the whole still brilliant – if you are not registered to e-file your annual and provisional tax returns then you are welcome to join the queue. Guess I will see you in August when I make my next trip to SARS to submit the few paper returns that I still cant get on e-filing – but at least I wont be waiting in any queues.