Not submitting a tax return to the South African Revenue Services (SARS) is a criminal offence, and the taxman will be quick to remind anyone who has broken the law.
While a few categories of taxpayers are exempt from filing tax returns—like anyone earning less than R500,000 a year from a single source—for everyone else, submitting a tax return is compulsory.
The tax season for individual taxpayers (non-provisional) will open on 15 July 2024 and run until 21 October 2024. Auto-assessment notices will start going out from 1 to 14 July 2024.
The filing season for provisional taxpayers will run from 15 July 2024 to 20 January 2025, and for trusts, from 16 September 2024 to 20 January 2025.
Tax Season 2024 dates
- Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024
- Auto-assessment notices: 1 – 14 July 2024
- Provisional taxpayers: 15 July 2024 to 20 January 2025
- Trusts: 16 September 2024 to 20 January 2025
For those who have been shirking their filing obligations in the past, SARS is likely to issue a letter of demand, which cannot be ignored, say tax experts at Tax Consulting SA.
“Receiving a Letter of Demand from SARS is never to be ignored, and often, where the correct response is not timeously delivered, spells the beginning of the end for the recipient taxpayer,” the group said.
The experts said that a letter of demand is SARS’ ‘final warning’ to taxpayers before things get messy, and failure to heed the warning may lead to “severe punitive measures, including taking civil judgment against the defaulting taxpayer, or even criminal prosecution”.
Among other things, the demand may include an alert to the non-submission of tax returns and relevant information or may point to the non-payment of tax debt due to SARS – all of which have consequences.
Non-submission of previous tax returns
In the case of non-submission of tax returns, the revenue services will indicate in the letter which years have been identified as missing submissions, giving taxpayers 21 days to submit outstanding returns.
Failure to do so could result in administrative penalties being imposed monthly per outstanding return—or, in extreme cases, a summons being issued and criminal prosecution being pursued, which could result in further fines or even imprisonment.
Audits, verification or requests for relevant information
If SARS audits a taxpayer or submits a request for verification or relevant information, in some extreme instances, taxpayers may have as little as three working days to cooperate, Tax Consulting said.
Again, failure to comply could lead to criminal prosecution, with the tax specialists warning that SARS isn’t merciful when it comes to pursuing these avenues and getting the money it is owed.
In both cases, once the revenue service has determined the amount owed, taxpayers are expected to pay the amount in full within 10 business days from the issue of the letter of demand.
“Should you miss this Final Demand, the Sheriff of the Court will bring it to your attention when attaching your assets; alternatively, you may find out a bit sooner when you wake up with empty bank accounts,” the group said.
Tax Consulting said that upon receiving a letter of demand, the priority should be identifying the exact default the demand pertains to. Taxpayers should then immediately address the non-compliance “before the trigger is pulled”.
Exemptions
While SARS will aggressively pursue non-compliant taxpayers, not everyone has to submit an income tax return.
Consultancy PwC provided a detailed breakdown of those who do and those who don’t.
Taxpayers who don’t need to submit a return
A natural person or deceased estate is not required to submit a return if the person’s gross income consists solely of one or more of the following:
- Remuneration (other than retirement lump sums) not exceeding R500,000 from a single source and employees’ tax has been withheld in respect of that remuneration;
- Interest income from a South African source (excluding a tax-free investment) not exceeding R23,800 for a person younger than 65; R34,500 for a person who is 65 years or older; or R23,800 for a deceased estate.
- Tax exempt dividends where the individual was a non-resident throughout the year of assessment;
- Amounts received or accrued from tax-free investments; and
- A single lump sum received from a pension fund, provident fund, pension preservation fund, provident preservation fund or retirement annuity fund and tax has been deducted in terms of a tax directive.
PwC noted, however, that the above does not apply to individuals in the following circumstances:
- If paid or granted certain allowances / advances relating to business travel, accommodation or subsistence;
- If granted taxable benefits or advantages derived by reason of employment or the holding of any office; or
- If any amount was received or accrued in respect of services rendered outside South Africa.
Auto assessments
Since 2021, individual taxpayers who have been auto-assessed by the taxman also don’t need to submit a tax return, as this is handled and processed automatically.
PwC said that as long as SARS notifies taxpayers that they are eligible for auto assessments and that this is accepted, the process will be wrapped up with no further input.
It said this is if the person’s gross income, exemptions, deductions, and rebates, as auto-assessed, are complete and correct.
If taxpayers do not accept the auto assessment, they will then be required to file a tax return.
