Income tax filing season is now open and many taxpayers eagerly await a refund as soon as they file their return. Previously, SARS was quick to reimburse taxpayers who were due to receive a refund, within a day or two. However, since 2014, tax advisers and auditors have seen several changes to the process that result in delays in refunds. The question is, why is the SARS process now being extended and what are the top three reasons why taxpayers are waiting longer for refunds?
1) Invalid bank details in RAV01
Invalid bank details according to SARS records may delay your refund. To prevent fraud, SARS verifies the bank details of many taxpayers. Before filing your income tax return, make sure that the bank details reflected in your RAV01 form (available in the SARS electronic filing) are reflected as valid. If you have changed your bank details since the previous filing of your tax return, first update your details on the RAV01 form and then file your return. In some SARS cases, you may need to personally visit the nearest SARS branch to verify the change of your bank details. You will be notified in writing. Please note that specific supporting documents will be required (be sure to check before entering SARS).
2) Special cap for SARS:
The special cap that is placed on refunds can only be lifted at a SARS branch. You will need to provide SARS with proof of your residential address, a certified copy of your identification, and a bank statement that is not more than 3 months old, stamped by the bank.
3) Verification of your tax return:
South Africa has seen a significant increase in the number of contributors selected for review or verification. If SARS requests supporting documentation, be sure to upload all relevant documentation that was used to compile the income and expenses claimed on your return. It is advisable to prepare a schedule that summarizes (for example) all your incurred medical expenses. If you receive a travel allowance, remember to attach the detailed log book and proof of purchase of the motor vehicle.
The Tax Service of South Africa (“SARS”) has published the deadlines for filing income tax returns. The deadlines depend on the form of filing the tax return. These deadlines do not apply to companies that must file their returns within 12 months after the close of their financial year through electronic filing.
The 2017 tax season will officially begin on July 1, 2017, and individual taxpayers will be able to file their returns for the tax year ending February 28, 2017. eFilers will be first in line and will be able to file their return beginning July 1, while the SARS branches and contact center will be open for attendance only as of July 3, 2017.
The Income Tax Law has been amended to impose administrative penalties for non-compliance. These fines can range from R250 to R16,000 per month. Please make sure you have all supporting documentation for your return, as SARS may request it if you are selected for a review. Protect supporting documentation for at least five years in case SARS needs to access it in the future.
