Filing period for all employers begins
Johannesburg, 1 July 2008 -- Today marks the beginning of a new phase in the development of the South African Income Tax system.
In the 2008 Tax Season, a new emphasis is being placed on the information supplied by employers to SARS in respect of the PAYE deducted from employees. This year employers will be required to meticulously and timeously submit records which will ensure that SARS is in possession of accurate information about their employees.
This information about the PAYE deducted and paid over to SARS will ensure that SARS has accurate information which will be used for 2 purposes:
* To pre-populate income tax returns for certain categories of individuals
* To verify (match) information supplied by individuals on their tax returns
In addition the information declared by employers, in terms of existing law will be utilized in PAYE audits of employers to verify whether the correct amount of tax was levied, deducted from employees, and paid over to SARS.
From the 1st of July 2008 all employers are required to complete and submit a Reconciliation Declaration (EMP501) which will record the amount of tax deducted from employees, the amount paid over to SARS and the amount appearing on IRP5 certificates of employees. Taxes deducted include PAYE, UIF and the Skills Development Levy (SDL).
While SARS will extend its services - through direct engagement and by providing automated tools and assistance to all employers who wish to comply – there will also be a far stronger focus this year on non-compliant companies and scrutiny on the accuracy of the information they submit to SARS.
The role of employers in the Income Tax System:
* Employers deduct employee taxes like PAYE (Pay-As-You-Earn) and SITE (Standard Income Tax on Employees) from the salaries of those they employ and thus act as agents in terms of the law on behalf of SARS
* The employer must issue an IRP5 or tax certificate to the employee which records how much an employee’s earning and deduction as well as the amount of tax the employer deducted and paid over to SARS. The IRP5 certificate enables each employee to submit an individual income tax return
* Employers have a 60 day period to complete and submit this information to SARS. This year the 60 day period starts on 1 July until 29 August 2008
* In order for employees to obtain a pre-populated return it will be necessary for their employers to have submitted their reconciliation declaration. Assistance will be provided to individuals where appropriate.
These steps indicate the crucial role of employers in the Income Tax System and why, in the interest of employees who represent a body of millions of registered individual taxpayers, it is necessary to provide SARS with payroll information that is accurate.
2008 Tax Season for Individuals: Important dates and procedures—
* The filing period for returns opens on 1 September 2008
* Individuals must REQUEST a return from SARS and can do so from 1 September 2008
* The deadline for the manual submission of returns is 21 November 2008
* The deadline for electronic submission of returns is 23 January 2009
* Certain individuals with income below R120 000 per year; who have a single employer and source of income; and who meet certain criteria WILL NOT have to complete and submit a tax return to SARS
* Their details and income stream will be automatically captured by the new process
I love procrastination!