Finance Minister Trevor Manuel on Thursday launched the 2008 tax-filing season, and announced changes to the personal income tax for individuals that would impact on the obligations of employers.
The new changes would require that employers submit accurate pay-as-you-earn (PAYE) information.
South Africa would have two filing seasons, one for employers and another for individuals. Employers would have between July 1, 2008, and August 29, 2008, to file their PAYE and have this information reconciled by the South African Revenue Service (Sars) before sending out workers' IRP5 forms.
Employers are required to issue employees with IRP5 tax certificates, where tax has been deducted from salaries.
Sars said that it had developed and would supply new software to employers to enable them to achieve simpler PAYE reconciliations.
The information would be prepopulated on the individual's tax return form and, thus, simplify the tax-filing process. Individuals would have until November 21, 2008, to submit manual tax returns and until January 23, 2009, to submit e-filing returns.
Further, Sars said that individuals that earned less than R120 000 a year and only had a single employer and no additional income or expenses in the year, would not be required to file an individual tax return.
It would have the information on its system and would be able to monitor noncompliance from those that were suppose to file a tax return, it stated.
Manuel called the tax-return simplification process one of modernisation and said the system was maturing.
Sars also said it had created a customised tax return form. The two new income tax returns, the IT12S and IT12C, which were introduced last year, would be merged into a single income tax return for individuals, the ITR12. The return would be customised according to the complexity of a taxpayer’s income tax affairs.
Those with standard declarations would receive a return containing only the necessary fields, while individuals with foreign dividends or business income, would receive the appropriate additional fields.
Owing to this, as well as the logistics and costs involved with sending out tax returns, Sars would send out letters to all registered taxpayers that would require individuals to request a tax return.
Requests for a tax return could be made telephonically, by using eFiling, sending a return request attached to the letter, or by visiting any Sars office.
All forms and requests would also be made available in multiple languages.
Sars explained that it had implemented a four-tier structure to its control centres in order to upgrade its service to taxpayers. This structure would allow taxpayers to reach the correct persons to deal with their specific queries.
Sars commissioner Pravin Gordhan said during a media briefing that the costs involved with its entire modernisation process, or personal income tax reform programme, which began in 2007, would amount to about R650-million for the year.
Sars noted that it hoped to continue simplifying and updating the tax return process, to the point where all third-party data, such as data from medical aid schemes, were prepopulated on tax returns.