Auditing your tax compliance profile

Budget 2021: Corporate tax amendments
March 9, 2021
April 7, 2021

Taxpayers who make use of the South African Revenue Service’s (SARS) electronic filing system (or as it is generally known, eFiling) will know that, in addition to containing a history of income returns, value-added tax, pay-as-you-earn, etc., a significant amount of personal and company data is stored on the platform. This includes information such as banking details, a person’s physical address, email addresses, and relevant contact persons for companies. Although the system can reportedly handle up to 150 000 returns per day during individual tax filing season, electronic filing usage is far below other countries such as the United States, where more than 90% of returns are filed electronically.

The purpose of SARS’s access to personal and company information is predominantly to ensure that they can adequately discharge their role and responsibility in administering the tax system. In fact, the Tax Administration Act goes so far as to criminalise taxpayer failure to update their information with SARS when it has changed.

Ensuring that your details are up to date with SARS is also in your best interest. For example, when a taxpayer enters into a dispute process with SARS, eFiling is an important channel through which official communication can be delivered to a taxpayer in terms of the dispute resolution rules. If the information captured on eFiling is incorrect (such as an incorrect email address), SARS would have good grounds to argue in court that they have discharged their duties and acted within the ambit of the law when delivering documents to addresses as available on eFiling. Taxpayers could, therefore, find themselves in a situation where they were supposed to receive information, but based on incorrect details, in fact, never did, and thus forgo a potential remedy to their dilemma in the process.

In a proper review of your eFiling status, one also often finds that there are small, historical matters that have not been attended to, such as small amounts of interest accrued on overdue taxes and returns that have been filed at a branch office, which shows as “not submitted” on eFiling. These small matters result in taxpayers carrying a “non-compliant” tax status with SARS. It is, therefore, good practice to appeal to your tax practitioner to request a tax compliance status profile annually to ensure that all administrative matters have been dealt with, and to request that your tax practitioner ensure that all relevant contact details are captured accurately on the system – especially if they at some stage have taken over your tax filing from either yourself or another tax practitioner.

“Auditing” your own tax and eFiling profile with SARS is one of those matters that should be attended to as part of your annual tax filing commitments and could potentially save much frustration on costs down the line.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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