Why you pay tax

MANY people feel they work too hard and are frustrated why tax has to be taken out of their salaries. Well, chartered accountant Refilwe Metenche explains why it is important for citizens to pay tax. 


Refilwe says that tax is a fee that is paid by various persons depending on the type of service they render, an activity they embark on or product they offer. Working individuals and corporate companies are examples of people who may be liable to pay tax. The purpose of tax is to finance government expenditure. One of the most important uses of taxes is to finance public goods and services, such as street lighting, street cleaning and road maintenance. She adds that another important aspect to be noted is that government has various parts to it. For example, the money you pay in taxes also goes towards paying the salaries of government workers such as legislators (who make laws), law enforcements like police and judges, firefighters and so forth. The country would be dysfunctional and come to a standstill if people were to stop paying taxes. “There would be no funds with which to pay law enforcement agencies or finance the public goods and services. The country would be ungovernable.”


Every year between July and November, citizens are required by law to file for tax. Filling for your tax for those who earn more than R350 000 a year can be a daunting exercise. But Refilwe warns against using agencies to file on your behalf. She says it’s rather easier if you visit your South African Revenue Service (SARS) branch as they deal with this on a daily basis and you won’t have to pay them for helping you. The easiest way to submit a tax return is via eFiling, for those who have the resources. “I would advise them to register for eFiling, if you have not already done so. There are agents online that are ready to assist you to complete your return at a click of a button,” she says. “It is important you take all your supporting documents such as your IRP5 (a tax certificate) which you get from your employer, proof of your identity, proof of residence (like a municipal account) and banking details like original bank statement for a speedy service.” Those that meet a certain criteria must submit an annual return called the ITR12 return to SARS every tax season. In this return, an individual has to declare all sources of income in a specific tax period.


The only way to register to become a taxpayer is to visit a SARS branch where the staff will register you on the SARS system. You need to take with you the relevant supporting documentation. Once you’ve been registered and given your tax number, you can then register for eFiling. This is a free and convenient way of interacting with SARS. From 1 April 2016, SARS has stopped accepting manual forms of payments. Tax payments are now done electronically or at a SARS approved bank. Taxpayers can now make payments at any SARS approved bank, or via electronic funds transfer.