With the rollout of auto-assessments from the South African Revenue Service (SARS) this week, tax practitioners are finding out that the taxman has thrown a fresh curveball at taxpayers: mandatory branch filing for late returns.
Tax practitioners say they have been hit with a message from SARS stating that tax returns older than five years cannot be requested via eFiling or MobiApp.
SARS goes on to request that the taxpayer make an appointment with a branch to submit these returns.
Robyn Gilbert, Individual Tax Team Manager at Tax Consulting SA, said the notice stems from changes made by SARS on 24 June, where the revenue service made it clear that MobiApp and e-Filing platforms would no longer process tax returns older than five years.
Accounting firm Latita Africa noted that, traditionally, SARS would notify tax practitioners of such developments before they happen, but this time around, it came out of nowhere.
“In this case, there seems to be widespread confusion about SARS’s move. Naturally, this has caused considerable frustration among tax practitioners, the group said.
Andre Bothma, founder of the tax firm Irhafu said this is also delivering mixed messages from SARS.
“On the one hand, SARS is trying so hard to enforce voluntary compliance and even forced compliance via their Auto-Assessment system, but in the same breath, they are now preventing people from becoming compliant in a relatively simple manner,” he said.
“Submitting a tax return on eFiling is no different to submitting a tax return at the branch. The assessment process remains the same. The verification process remains the same.”
Other practitioners appear to share this sentiment, with some considering it an arbitrary change by SARS with no real upside for taxpayers or the revenue service itself.
According to tax legal specialist at Latita Africa, Thomas Lobbanat, “We just don’t see the point in forcing taxpayers to book a branch appointment to file older tax returns.
“The e-Filing verification process is arguably already quite sufficient. We need to see some clear indication from SARS as to the reasons for this change.”
Gilbert noted that SARS’ guide had made a specific provision exempting “active tax practitioners with cases where an administrative penalty has been levied” from the 5-year limit. However, even this has not followed through.
“Our experience indicates that we are still unable to proceed with submissions on behalf of taxpayers. This situation may put taxpayers at risk for monthly penalties, which will continue to be levied until the manual submission is made with SARS,” she said.
Confusion
The tax practitioners said the change is confusing, with people often having to wait weeks to get an appointment with SARS.
Gilbert said the issue is creating significant frustration and a backlog for both practitioners and SARS.
“The backlog is evidenced by the SARS booking system, where the earliest available appointments are around August, a full month away,” she said.
Lobban said it is a step backwards for the revenue service, which is supposedly trying to encourage better compliance and promote a move to digital channels, but now appears to be putting administrative blocks in place that will delay those seeking to regularise their tax affairs.
“Until SARS provides more information on the issue, taxpayers who wish to update their returns may face an even more daunting hurdle—facing down a SARS official in person. Tax practitioners will also face an additional constraint on their capacity at a critical time of the year,” he said.
BusinessTech asked SARS about the new policy and its implementation reasons. The revenue service did not acknowledge receipt or respond by the time of publication.
“The purpose of this change has not been communicated, and we await further clarification,” Tax Consulting said.
“We believe this change could hinder taxpayers’ ability to ensure historical compliance and, in turn, hinder SARS’s intention to promote the use of their digital systems and streamline the compliance process.”
Read: SARS warns taxpayers to be on high alert – and double-check emails
