SARS on why your tax matters! – Part 3

Fareed Khan, a regional director at the South African Revenue Service (SARS) gave the latest update on why your tax matters.

“In the latest of our regular SARS columns, we give some useful tax hints and tips to those running or wanting to start a small, micro or medium enterprise (SMME).”

• Responsibility: Business owners are responsible for filing and making payment to SARS accurately and on time. This is regardless of whether you have a tax practitioner or someone else handling your tax matters.

• Payments: Tax payments can be made using eFiling or a direct bank transfer. Payments must be made on time to avoid interest and penalties. Since December 2020, SARS no longer accepts cheque payments.

• Record-keeping: Good record-keeping helps you explain what is declared on your tax return in case SARS has questions regarding information you declare. Keeping supporting documents such as sales slips, invoices, receipts, bank deposit slips and other documentation will help you manage your tax matters better and ensure that you remain tax compliant. This is particularly relevant to a VAT vendor who is required by law to keep records, which includes financial statements, purchase invoice, sales records, credit and debit notes, for a period of five years.

• Registration: You are required to register your business with SARS, whether you are a self-employed individual or business. If you have registered your company with the Company and Intellectual Property Commission (CIPC), formerly called CIPRO, on www.cipc.org.za, SARS will automatically generate a Company Income Tax (CIT) reference number for you. The company representative must then register on SARS eFiling to update information, and transact electronically and conveniently with SARS. It is important to note that it is still the taxpayer’s responsibility to ensure they are registered for the correct taxes e.g. VAT, PAYE, income tax, etc. A self-employed person/sole trader or persons in partnerships need to register for personal income tax (PIT) AND other taxes directly with SARS via SARS eFiling.

In the next column, we will look at the various taxes applicable to small businesses and when the different payments need to be made. For more information on your tax responsibilities and how to be tax compliant, visit www.sars.gov.za and click on the small business link.

Regional News

• SARS reopened its branch offices on 17 February 2021 to serve the public.

As part of SARS’ commitment to all members of the public, please take note of the following:

A. Bookings can only be made via the SARS website, by clicking here.

B. All virtual bookings via the SARS site will continue to be honoured via a virtual engagement (MS Teams or telephonic engagement).

C. The SARS Contact Centre (0800 00 7277) will continue to service any queries from members of the public.

D. All South African Ports of Entry manned by SARS Customs officials will continue to operate during this lockdown period.

Please note that strict social-distancing measures will apply, and all members of the public are required to wear masks at all times when entering any SARS building or engaging with any SARS official. No access will be allowed without the wearing of a mask. These measures are being undertaken with the well-being of employees and all South African citizens in mind, and we appeal to all taxpayers to take this very seriously.

• Tax number: We are still seeing many people coming in to our branches to get their tax number, which they have forgotten. However, there is an easier way to do it! Just go to the SARS website (www.sars.gov.za), click on “What’s my tax number” and complete the required fields.

• Register for eFiling early! The easiest way to submit your tax return is via eFiling or the SARS MobiApp, which allow you to interact with us without having to queue at a SARS branch. We urge taxpayers to register for one of our digital channels long before filing season begins this year in June/July.

• Outstanding returns and outstanding debt payments:

SARS regularly calls taxpayers with outstanding returns and debt to remind them to submit the returns and pay outstanding debt. Taxpayers are informed about available payment options, including deferred payment arrangements if required. However, many people reject these calls when they see that it is a SARS person calling. We encourage you to take this call and rather engage the SARS employee on various affordable options for you to settle your debt. Failing to do so could have serious consequences, including SARS appointing your bank as an agent to pay over the monies owed, and/ or issuing a civil judgement against your name or your company’s name. This could result in unintended difficulties for you as the debtor.