Latest news with #Sars'
IOL News
09-07-2025
- Business
- IOL News
What taxpayers need to know for the 2025 tax season in South Africa
Discover how Sars' new Express Access feature is set to transform the tax filing experience for millions of South Africans, making compliance easier and more efficient for the 2025 tax season. Image: Supplied The 2025 tax season started on Monday, and the South African Revenue Service (SARS) has rolled out several updates to make things easier for taxpayers. Some changes are technical, while others will directly affect how individuals and provisional taxpayers file their returns. Here's what you need to know. Key filing dates Auto-Assessments: 7–20 July 2025 (SARS will automatically assess certain taxpayers — no need to file unless asked.) Standard Individual Filers : 21 July – 20 October 2025 Provisional Taxpayers : 21 July 2025 – 19 January 2026 Trusts: File from 19 September – 19 January 2026 Big updates and what they mean Some provisional taxpayers will join auto-assessment Until now, auto-assessments were for non-provisional taxpayers. However, this year, SARS will invite qualifying provisional taxpayers to opt in for this simplified process. If accepted, these individuals don't have to manually submit a return unless they disagree with the auto-calculated outcome. Claiming foreign tax credits (Section 6quat) If you paid tax overseas on capital gains, you can now use that tax credit more fully in SA. What's new is that unused foreign tax credits can be carried forward for up to 6 years, giving you more time to benefit. More information on Tax Certificates (Sections 11(nA) and 11(nB)) If you are an employer, you must now report specific deductions on your IRP5/IT3(a) under two new codes: 4042 – related to relocation or transfer expenses (Section 11(nA)) 4058 – related to other qualifying employer-covered expenses (Section 11(nB)) Labour brokers now count as provisional taxpayers From March 2025, labour brokers with exemption certificates will be classified as provisional taxpayers. They must now submit provisional tax returns (IRP6), just like freelancers and consultants. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Extension of learnership tax benefits The learnership incentive under Section 12H (used by employers) has been extended until March 31, 2027. Claiming interest deductions on foreign income You can now claim interest-related expenses linked to your foreign interest income under a new section in the return, aligning with SARS's Practice Note 31. Backdated salary and pension codes New tax codes (3623 and 3673) now exist for salary or pension payments paid late. According to SARS, this will ensure correct tax treatment. Estates can report exact interest-earning dates Executors handling deceased estates can now enter specific dates for interest earned, which helps SARS apply the correct exemption. New codes for tax-free dividends Two new source codes help classify local (4306) and foreign (4307) dividends that are exempt from tax. Tax return types are now based on residency (Section 9H) Depending on your residency status, SARS will now show you a custom return form: From the 2025 tax year, RSA tax-resident and non-resident taxpayers will be presented with a specific ITR12 and IRP6 tax-return type based on taxpayer registration status available with SARS, i.e.: ITR12 RSA tax residents will be presented with the resident wizard questionnaire. Non-residents will be presented with the non-resident wizard questionnaire. Taxpayers who ceased RSA tax residency during the year of assessment will be presented with the resident and non-resident questionnaire. IRP6 RSA tax resident will be presented with the resident return. Non-residents will be presented with the non-resident return. Taxpayers who ceased RSA tax residency during the year of assessment will be presented with resident and non-resident returns. Trust income and marriage in Community of Property If you receive trust income and are married in a community of property, SARS will automatically allocate 50% of that income to your spouse. Carry-over balances are delayed if you're under review If SARS is still verifying your return, it won't immediately apply unused deductions or credits (like Section 18A donations). SARS will adjust your return once the review is complete. Updating bank details gets easier When updating your banking info, you'll now choose from your verified bank accounts already held by SARS instead of typing them out manually. You can now reinstate RSA Residency Online If you previously emigrated and became an RSA tax resident again, you can now declare your reinstatement date directly on the RAV01 form. Cape Argus
The Citizen
08-07-2025
- Business
- The Citizen
Common pitfalls to avoid this tax season
It is the time of the year that most taxpayers dread: getting their income tax assessments done and get it done right. Tax season started on Monday, and the eFiling system at Sars is already slowing down due to high volumes as people try to get their assessments done. The tax filing season is the period when taxpayers must submit their income tax returns to Sars for the previous tax year, which runs from 1 March to the last day of February of the following year. For this year, it would be from 1 March 2024 to 28 February 2025. Johan Werth, franchise principal and financial adviser from Consult by Momentum, says when it comes to tax season, there are three types of people: The Proactive, who knows what to do and get it done fast The Procrastinator, who knows what to do but leaves it to the eleventh hour and The Panicker, who is not really sure what to do and hopes that if they ignore it, it might go away. Auto assessments run from 7 to 20 July 2025, and non-provisional taxpayers who were not auto assessed will be able to submit and file their income tax returns between 21 July and 20 October 2025. ALSO READ: Didn't receive Sars auto-assessment notice? You can now file for tax return Do not think you have no assessment to be done during tax season Werth says you are a 'Procrastinator' or 'Panicker', a common but dangerous mistake is assuming Sars will auto-assess you or that no filing is needed, especially if you earn under R500 000 per year. 'You can see if you are liable to submit a return by checking to see if you received any communication from Sars or by using the Sars website. You can also consult a tax practitioner to confirm if you are required to file.' People who must file an income tax return are South African residents and non-residents who earned income in South Africa during the tax year, as well as people who: have capital gains, foreign income, or receive dividends not subject to automatic withholding tax have multiple income sources, such as a salary and rental income earn more than the tax threshold for the year, such as over R95 750 for under-65s in the 2025 tax year want to claim deductions, such as medical expenses, retirement annuities and travel allowances are provisional taxpayers – usually people who earn income not subject to pay as you earn (PAYE), such as freelancers, sole proprietors, or rental income earners. ALSO READ: Are you making money with crypto assets? Sars is looking for you Other common mistakes tax payers make during tax season Werth says aside from not filing a return at all, people make these common mistakes during tax filing season: Missing the deadline' late or missed submissions can lead to penalties, and you should set reminders and file early, even if you are auto-assessed. Submitting incorrect or incomplete info: outdated details, missing certificates or source code errors can delay processing, and you should double-check all data and use Sars' eFiling guided tools. Ignoring your auto-assessment: do not just accept it blindly; review for missing deductions, such as retirement annuities or medical aid, and file manually if you need to. Not claiming eligible deductions: medical costs, travel, a home office and retirement contributions can reduce your tax, but only if you claim them with proof. Poor document management: if you fail to keep receipts, logs or tax certificates, it puts you at risk in an audit. Store everything digitally for at least 5 years. ALSO READ: Beware of these scams during tax season What happens if you do not file during tax season? And if you do not file? Werth says failing to file a return when required can come at a high cost, even if Sars owes you a refund. 'Sars may impose monthly administrative penalties of up to R16 000, initiate legal action and block access to essential services like home loans or emigration clearance.' 'It is a criminal offence not to file when you are legally required to. Even if you earned below the threshold, it is worth checking your status on eFiling or with a tax practitioner.' Werth shares these tax filing tips to keep you on track and make the process smoother and more financially beneficial: Keep all supporting documents for five years, whether digitally or in the cloud. Do not overlook key deductions like retirement annuities, home office expenses or out-of-pocket medical costs but, only claim what you are eligible for. Check your Sars auto-assessment, especially if you have income from multiple sources. Use a professional such as a financial adviser or tax practitioner if you struggle with the admin, especially if your situation is more complicated and includes things like freelancing, working overseas, or capital gains. Tax season does not have to be stressful, Werth says. 'But ignoring it, or rushing through it, can lead to bigger problems down the line.' There were many complaints the past two days from taxpayers trying to check their auto-assessments. Sars says on its website its system is currently experiencing unusually high traffic volumes. 'We value your experience and appreciate your patience as our dedicated teams work diligently to resolve the issue and restore full service as quickly as possible. We apologise for any inconvenience this may have caused.'
IOL News
11-06-2025
- Business
- IOL News
Sars goes digital: key changes for taxpayers
Discover how Sars' transition to digital correspondence affects taxpayers and what steps you need to take to stay compliant. Image: File photo. The South African Revenue Service (Sars) has officially discontinued the printing and posting of all system-generated letters, effective May 31, 2025. From this date forward, all Sars correspondence will be delivered electronically via eFiling and other digital platforms. This development is in line with Sars' ongoing digital transformation strategy aimed at improving operational efficiency, reducing reliance on third-party service providers, ensuring faster delivery of communication, and supporting environmental sustainability initiatives. The importance of keeping your Sars registered details up to date Now that Sars has moved entirely to digital correspondence, taxpayers must ensure that their contact and profile information is accurate and regularly maintained. This includes: An active and accessible email address linked to your Sars profile Updated mobile numbers for notifications Correct details of the registered representative for entities Regular access to your Sars eFiling account or MobiApp Failure to maintain up-to-date information may result in missed communications, with serious consequences for your tax compliance status. Consequences of Ignoring Sars Correspondence System-generated letters from Sars often contain time-sensitive information such as: Audit notifications and verification requests Final demands or payment reminders Requests for supporting documentation Assessment adjustments or penalty notices Dispute or objection outcomes Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Ignoring or missing these letters can have significant implications, including: 1. Penalties and Interest Missed deadlines may trigger automatic administrative penalties and the accrual of interest on unpaid taxes. 2. Legal Enforcement Failure to respond to demands or audit requests could lead to collection actions, such as garnishee orders or asset seizure. 3. Loss of Tax Compliance Status Your tax compliance status may be negatively affected, which can impact business operations, tender applications, or international emigration processes. 4. Missed Refunds or Appeals Certain actions, such as appealing an assessment or claiming a refund, are subject to strict time limits. Delays caused by missed correspondence may result in forfeiting your rights or delaying funds due to you. What Taxpayers Should Do To adapt to this change and remain compliant, Sars encourages taxpayers to: Log in to their Sars eFiling profile and review and update all registered details Monitor their eFiling inbox regularly for new correspondence Respond promptly to all Sars communications Engage the services of a registered tax practitioner if assistance is required
IOL News
05-06-2025
- Business
- IOL News
Sars launches Project AmaBillions: expect a surge in VAT audits
Discover how Sars' new initiative, Project AmaBillions, is set to increase VAT audits significantly, impacting businesses across South Africa. Learn what steps you can take to ensure compliance and avoid penalties Image: Ziphozonke Lushaba / Independent Newspapers According to recent media reports, Sars has launched a new initiative — Project AmaBillions — as part of its broader strategy to boost revenue collection by an additional R70 billion over the next three years. To support this objective, Sars has reportedly already recruited 500 new staff members, with an additional 1,000 to 1,500 appointments anticipated. While this expanded capacity will enhance Sars' ability to collect, across multiple tax types, Value-Added Tax (VAT) remains an easy target, with a notable increase in VAT-related audits, verifications, and additional assessments already being observed. In this evolving compliance landscape, businesses, particularly those operating in complex or high-risk sectors, are encouraged to revisit their VAT positions and ensure that both legal interpretation and supporting documentation are up to standard. VAT as an Easy Win for Sars The government's recent proposal to raise the VAT rate met significant public resistance and was ultimately shelved. However, the fiscal demands that prompted the proposal remain unchanged. In the absence of a rate increase, an easy target is the enhanced enforcement of existing VAT obligations as a more immediate mechanism to protect the tax base. Given the transactional nature and extensive reach of VAT, it remains one of the most active areas of Sars enforcement, and from a tax collection standpoint, is second only to Personal Income Tax, per Sars' Revenue Announcement for the 2024/25 Financial Year: Except from the 2024/25 Revenue Announcement presentation: Recent trends confirm an increase in audit activity, particularly where VAT positions rely on complex interpretation or are not fully substantiated by documentation. Certain areas are particularly at risk: Input tax deductions , where Sars may challenge the deductibility based on the nature of the underlying expense, its link to taxable supplies, or the quality of supporting invoices; Zero-rated supplies , especially exports, where documentary proof and timing requirements are closely examined; and Apportionment calculations , in cases where businesses make both taxable and exempt supplies, and Sars queries the method used to determine the deductible portion of input VAT. In addition to heightened audit activity, input tax deductions have become increasingly the subject of legal proceedings, with courts being asked to assess whether deductions meet the requirements of the VAT Act. Often, the success or failure of a claim rests both on the commercial reality of the transaction and on whether the taxpayer can demonstrate compliance with the relevant documentary and legal criteria. Discharging the burden of proof As a self-assessment system, VAT places the burden of proof squarely on the taxpayer. Sars does not need to prove a taxpayer is incorrect; rather, it is the taxpayer who must prove that the tax position adopted is correct. Documentary shortcomings that can result in adverse audit findings may include: Incomplete or non-compliant tax invoices; Missing or outdated export documentation; Contracts or agreements that do not support the VAT treatment applied; and A lack of internal policies governing apportionment or exempt supply treatment. Even businesses with reputable systems or historic Sars engagements should not assume automatic compliance. Audit readiness requires continuous alignment with Sars' current expectations and the evolving interpretation of the VAT Act. High-risk for high reward: which businesses are most scrutinised? While all VAT-registered vendors are subject to review, recent enforcement trends suggest that the following types of businesses may be more susceptible to VAT scrutiny, especially in light of the looming 'Project AmaBillions': Exporters of goods and services , particularly where zero-rating is applied; Foreign suppliers of electronic or remote services to South African recipients; Property developers and investors , due to the complexity of VAT on construction, disposals, and mixed-use properties; and Enterprises with substantial input tax deductions or recurring VAT refunds . In these cases, a proactive review of VAT compliance and risk report may assist in identifying and addressing potential exposure, before they are raised by Sars. A Coordinated Tax Debt Collection Strategy 'Project AmaBillions' is more than a revenue slogan — it reflects a deliberate shift by Sars toward coordinated and data-driven enforcement, leading to increased tax revenue collections. This includes the use of Artificial Intelligence tools, targeted audit selection based on risk modelling, and specialised teams focused on high-yield areas such as VAT, High-Net-Worth taxpayers, and Cryptocurrency. With the recruitment of up to 1,500 additional staff, Sars is positioned to expand its enforcement reach significantly over the coming months. Proactive compliance is key While increased audit activity may place pressure on internal finance and tax teams, early intervention and strategic review can help businesses avoid prolonged disputes or unintended liabilities. A targeted VAT review can assist in confirming that: Zero-rated supplies are supported by adequate and compliant documentation; Input tax deductions meet all legal and documentary requirements; Invoicing and contractual frameworks comply with SARS standards; and Internal VAT procedures, including apportionment and record-keeping, are robus t. Early action prevents future exposure Where there is uncertainty around VAT treatment, and businesses find themselves in a potentially precarious position of now facing Sars scrutiny, the best practice is to seek the assistance of a tax professional, ensuring the best compliance strategy is followed. Early assessment can help prevent future challenges, reduce the risk of penalties and interest, and ensure Sars readiness in an increasingly vigilant digitized environment.
The Citizen
21-05-2025
- Business
- The Citizen
Godongwana cuts zero-rated food basket in Budget 3.0
With the VAT hike falling away, Godongwana also reversed the decision to expand the zero-rated food basket. Finance Minister Enoch Godongwana on Wednesday announced that the zero-rated food basket will no longer be expanded. The minister made the announcement while delivering the third budget speech in Cape Town. Scrapping the expansion of the zero-rated food basket follows the decision not to implement a 0.5% increase in the value-added tax (VAT) this year and next. ALSO READ: Godongwana cuts government spending to offset VAT shortfall Food basket expansion In the second budget speech delivered on 12 March 2025, he announced that the zero-rated food basket would be expanded. This was done to alleviate pressure on already struggling South Africans. The list included edible offal from sheep, poultry, goats, swine, and bovine animals; specific cuts such as heads, feet, bones, and tongues; dairy liquid blends; and tinned or canned vegetables. However, in the third budget speech, he stated that this expansion would fall away. 'As a result, the expansion of the zero-rated basket, which was included to cushion poorer households from the VAT rate increase, falls away.' The zero-rated food basket. New tax measures needed While delivering the budget, he added that they need to propose new tax measures, aimed at raising R20 billion. 'We have allocated an additional R7.5 billion over the Medium-Term Expenditure Framework (MTEF) to increase the effectiveness of the South African Revenue Service (Sars) in collecting more revenue. 'Part of this allocation will be used to increase collections from debts owed to the fiscus.' Godongwana said the taxman has indicated that this could raise between R20 billion to R50 billion in additional revenue per year. ALSO READ: Budget 3.0: First fuel levy increase in three years – Here's by how much Sars welcomes revenue collection estimations Meanwhile, Sars Commissioner, Edward Kieswetter, welcomed the revenue collection estimate of R1.986 trillion for the 2025/2026 financial year, as announced by Godongwana. 'This revenue estimate comes against the backdrop of Sars' final unaudited revenue outcome for 2024/25, which is R1.86 trillion, R8.9 billion more than the revised estimate.' He noted that, given the current tough domestic and global economic conditions, the R1.986 trillion revenue estimate is a challenging estimate. 'The estimate announced by the minister imposes the responsibility on Sars to implement revenue-raising initiatives. 'Debt collection is one such. Therefore, Sars will specifically accelerate work on collecting all debt, with a specific focus on undisputed debt. Sars acknowledges South Africa's economic difficulties and the effect that this will have on the aggregate amount of debt collected.' Tax bracket creep In this budget speech, Godongwana once again did not adjust personal income tax brackets for inflation, which is expected to generate an additional R15.5 billion in revenue in the 2025/26 fiscal year. By not adjusting tax brackets to keep pace with inflation, the government allows a phenomenon known as 'bracket creep' to occur. This occurs when people receive small raises due to inflation, but those raises cause them to be pushed into higher tax brackets. As a result, they might end up with less money in their pockets each month, even though tax rates have not changed. The table below illustrates how the planned tax changes in the 2025 Budget will impact government revenue over the next three years. NOW READ: Budget 3.0: not austerity budget, but a redistributive budget
