The South African Revenue Service says it auto-assessed 5.8 million taxpayers successfully from 7 to 20 July, and 99.6% of the automatic assessments have remained unchanged.
Several tax practitioners questioned this statistic, saying their understanding is that auto-assessed taxpayers have until 20 October to correct their assessments if they detect errors or omissions.
One practitioner, who did not want to be quoted, said the statistic is “misleading”. “When a taxpayer is overtaxed, they tend to amend their returns. However, not many people will correct an understated return when there is the possibility of an increased assessment.”
Digital tax assistant Tax Tim states on its website that SARS’s auto assessments are “frequently incomplete”. This year, there are even more sections to fill in, doubling the likelihood of missing something important. It warns that SARS can penalise taxpayers who make mistakes, even if they were unintentional.
Spokesperson Siphithi Sibeko says SARS believes its algorithms and third-party data are complete. If anything comes up later, taxpayers can still make changes.
“But we are saying that the 99.6% acceptance is based on all the information at our disposal, and we are convinced that we have sufficient third-party data to say we are almost 100% correct in our assessments.”
Theo Burrows, secretary-general of South African Tax Practitioners United, says the impression left by the SARS statement is that almost all the people who received auto assessments were happy with them because they kept their assessments unchanged.
In practice, the understanding is that SARS will issue the assessments until 20 July and only from 21 July will taxpayers have an opportunity to change anything they do not agree with, and they have until 20 October to do so.
SARS disagrees. “Once you are auto-assessed, we are done with you. When we say 99.6% have remained unchanged, it means they have accepted that their auto assessment is correct,” says Sibeko.
The people who will still have dealings with SARS are the 0.4% taxpayers who did not accept their auto assessment. They have until 20 October to make the necessary changes, he adds.
“People who have received their refunds cannot come back and say there was a mistake. Auto assessment means we have auto-assessed you, you accepted, and we are done.”
SARS says if a taxpayer was auto-assessed in the past and did not receive an auto assessment this year, it means their tax affairs have become more complicated. Non-provisional taxpayers who did not receive an auto assessment by 20 July must file before the October deadline.
Individuals who were not auto-assessed could start filing their returns from 21 July and have until 20 October. Provisional taxpayers have until 19 January next year.
With auto assessments, SARS uses data sourced from third-party data providers to assess taxpayers. This includes data from employers, banks, medical schemes, and retirement funds.
South Africa introduced auto assessments in 2019. Countries such as New Zealand, Sweden, Norway, Finland, and Spain also have pre-filled tax returns based on third-party information.
Digital channels
SARS says the few taxpayers (the 0.4%) who might need to update their tax returns with outstanding information that SARS does not have can use eFiling or the SARS Mobi App.
More than 2.1 million taxpayers have interacted with SARS through its digital channels. Of these, 1.1 million interactions were serviced by the online query system, 707 000 through WhatsApp, and 290 000 with the Lwazi Chat Bot. More than 10.2 million unique users have successfully logged into SARS’s online channels since 4 July.
Taxpayers who owe SARS are urged to make payments as soon as possible or make payment arrangements.
SARS says in a statement only refunds of more than R100 will be automatically paid into taxpayers’ bank accounts within 72 hours once the assessment has been completed.
At the start of tax filing season on 21 July, SARS had paid out R10.6 billion in refunds within 72 hours.
SARS has also been warning taxpayers against scamsters. “SARS urges taxpayers to remain extremely vigilant and keep their details confidential. There have been many attempts by scammers to defraud taxpayers.”
SARS will never ask taxpayers to use any link to engage with it. Taxpayers must protect their eFiling login details and use only registered tax practitioners.
Amanda Visser is a freelance journalist who specialises in tax and has written about trade law, competition law, and regulatory issues.
Disclaimer: The views expressed in this article are those of the writer and are not necessarily shared by Moonstone Information Refinery or its sister companies. The information in this article is a general guide and should not be used as a substitute for professional tax advice.
It is interesting that SARS says this when they have done auto-assessments on taxpayers who lodged a provisional tax return showing a significant payment. And refunded this to the taxpayer on auto-assessment.
It is also worth noting that the onus is on SARS to prove the auto-assessments and not the taxpayer. As commented, if there is an understatement, whose fault is it?
Spokesperson Siphithi Sibeko shows the total ignorance and arrogance with a statement such as this: “People who have received their refunds cannot come back and say there was a mistake. Auto assessment means we have auto-assessed you, you accepted, and we are done.”
I am a tax practitioner and have seen several incorrect auto assessments. I will probably sit on them until 19 October (where it suits me) and only then submit the correct tax return. That certainly does not mean that “you accepted” as this arrogant SARS official states.
SARS are so much in our faces with their wonderful auto assessments but we cannot even download and submit company or trust tax returns at the moment. SARS cannot even give us a date when company filing season will open.
My advice to the SARS official would be to just “shhh”.