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Malose Monama

THE overhaul of the country’s personal income tax process was taken a step further this week.

The new system is expected to culminate in a return-free system where the majority of salaried workers will not have to file any returns.

Finance Minister Trevor Manuel this week unveiled changes focused on the legal obligations of employers who administer payroll taxes.

The changes aimed to make filing a return easier for individuals and to provide companies with free software for automated payroll reconciliations and technical assistance.

The SA Revenue Service (SARS) last year implemented the first phase of the income tax reform programme, which saw the tax return form simplified and reduced to two pages.

Individual taxpayers also did not have to submit supporting documents to the barcoded returns which were scanned and assessed through an automated process for faster turnaround times.

Companies had until June 30 to prepare for the changes, including acquiring the free software. They would then have a 60-day window period from July 1 to August 29 to submit pay-as-you- earn (PAYE) deductions to SARS.

The payroll information from employers would enable SARS to issue the majority of taxpayers with a completed return that already contains all their income tax information.

Manuel said: “The changes will contribute to the important policy objective of government to expand social assistance through the introduction of a wage subsidy and social security to all working South Africans.”

Implemented successfully, the proposed changes would result in individual taxpayers with annual incomes below R120 000 from a single income source not having to complete and submit a tax return.

The filing season would open on September 1 and individual taxpayers would have to request returns from SARS. SARS commissioner Pravin Gordhan said: “SARS will not issue or mail any returns to taxpayers this year. Individual taxpayers will have to call in to request a return.”

The deadlines for manual and electronic submissions were November 21 this year and January 23 next year, respectively.

Bill Lacey, tax consultant to the SA Chamber of Commerce and Industry, said the changes were welcomed as they would ensure greater compliance by companies and employers.

“Of concern is the added administration burden on businesses that may already have some other software in place. It also remains to be seen whether SARS can supply the new software to all businesses within the set time frame,” he said.

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