This Freedom Month is about ‘consolidating and safeguarding our democratic gains’. It is also an opportunity to reflect on the impact of adhering to your tax obligations as it contributes to optimal revenue collection and improvement of the quality of life for all citizens.
Over the last few years, SARS has made great strides in revenue collection that enables government to provide services to the public and citizens, especially in the historically disadvantaged communities.
The gross tax revenue of R2.068t for the 2022/23 financial year represents a year-on-year growth of 9.7%. This is a milestone achievement where SARS has exceeded R2t gross revenue for the first time in our 25-year history.
As we continue to do the right thing by paying our taxes, we should be reminded that tax compliance is aligned to the Bill of Rights as enshrined in the Constitution.
Some of the rights that tax compliance upholds and promotes include the following:
- The right to privacy, as envisaged in Section 14 of the Constitution.
- The right to information, as envisaged in Section 32 of the Constitution, read with the Promotion of Access to Information Act 2 of 2000.
- The right to just administrative action as envisaged in Section 33 of the Constitution, read with the Promotion of Administrative Justice Act 3 of 2000.
- Every adult citizen has the right (a) to vote in elections for any legislative body established in terms of the Constitution, and to do so in secret; and (b) to stand for public office and, if elected, to hold office.
SARS is cognisant of all these rights and ensures that they are upheld and promoted in our interaction with taxpayers.
Employer filing season
Filing season 2023 for employers opened on April 1 and will close on May 31. Employers are required to file their annual reconciliation declaration (EMP501) during this period, reflecting accurate payroll information about their employees, employees’ tax (PAYE) payments made, and tax certificates (IRP5/IT3) as generated, covering the full tax year from March 1, 2022 to February 28.
As an employee, ensure that your employer provides you with an IRP5 that has been submitted to SARS. If not, you will have difficulty submitting your own personal Income Tax return later in the year.
Providing clarity & certainty
To make it easy to reconcile, SARS provides information and guidelines that are simple and clear (more info on the SARS website: www.sars.gov.za).
This includes:
- Employers, tax practitioners and payroll administrators need to download the latest e@syFile™ version via the SARS eFiling website.
- Employers must submit outstanding monthly declarations (EMP201) and annual reconciliations (EMP501) to SARS prior to submitting the EMP501 for 2023.
- Employers must register employees for income tax purposes using single (individual ITREG) and bundle IT registration (bundled ITREG) for existing tax numbers as well as new registrations available on e@syFile™.
Submission channels
Employers with up to 50 employees have a choice between using SARS eFiling or SARS e@syFile™. But Employers with more than 50 employees must use SARS e@syFile™.
Penalties for non-compliance
An employer who files EMP501s late will be penalised under the provisions of paragraph 14(6) of the Fourth Schedule to the Income Tax Act 58 of 1962, where the penalty will be equal 1% of the year’s PAYE liability, for each month that the return is late and increment up to 10% of the year’s PAYE liability.
