The South African Revenue Service (SARS) is committed to providing certainty and clarity to all taxpayers and traders regarding their tax and customs obligations so that they can remain compliant and to ensure that transacting with the organisation is as simple and easy as possible.
However, the ease and simplicity of transactions with SARS depends on each segment of taxpayers, traders and third parties fulfilling their legal obligations to ensure a seamless service offering by SARS.
Therefore, SARS calls on employers to ensure that they are ready to submit their annual reconciliation declarations with the latest and most accurate payroll information about their employees and the tax they have deducted.
At the same time, SARS expects that providers of third party information from institutions who administer medical aid schemes, retirement annuities and others also provide the latest and accurate information to make it easy for taxpayers who are required to file an income tax return.
The data that must be submitted to SARS from employers should cover the Monthly Employer Declarations submitted, payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March to 28/29 February. Information submitted by third parties should cover the same tax period.
From the side of employers, their payroll data is of vital importance to SARS. Firstly, it gives a reconciled account of what amounts of tax the employer deducted from the taxable remuneration of each of its employees. Secondly, it shows what amount of tax the employer has paid to SARS on behalf of the employee. It also records other allowances that an employer pays to an employee as part of their remuneration benefits.
Based on this payroll information and data from third parties, SARS will be able to issue an income tax return to taxpayers that is pre-populated with the relevant information for the ease and convenience of taxpayers who do not have complex tax affairs. For these taxpayers, filing a return becomes a simple matter of checking that all the information pre-populated on the return is correct and then submitting the return to SARS.
Employers and third parties have from 1 April to 31 May to submit their data to SARS.
In the context of the Covid-19 pandemic and the relief offered to individuals, employees and employers in distress, SARS is determined to ensure that the compliance rate amongst employers increases substantially this year.
Employers who fail to submit payroll data on time may become liable for late submission penalties of up to 10% of the value of their payroll.
During this challenging period of Covid-19, it is incumbent on every taxpayer and trader to remain compliant. Such compliance and revenue contributions enables government to provide the important social goods and services to vulnerable South Africans and to employ our heroic frontline workers in the fight against Covid-19. These contributions have also enabled government to begin a vaccination programme to create a herd immunity against the virus.
SARS sincerely thanks the compliant employers who have remained compliant every year by filing their declarations and making the necessary payments on time. In the interests of their employers and a seamless and hassle-free filing season, we urge all employers to now prepare accurate and up-to-date information that should be submitted to SARS.