By Anja van den Berg
This is the season for the submission of tax returns! The tax season opened on 1 August 2019 for all taxpayers.
In light of this, the South African Revenue Service (SARS) has announced several changes ahead of the start of the 2019 tax season.
Arguably the biggest change made is that taxpayers who earn below R500 000 are no longer required to submit returns.
This is an increase on the previous threshold of R350 000. SARS explained that taxpayers who meet the following criteria will not have to file returns:
- Their total employment income for the year before tax must not exceed R500 000.
- They only receive employment income from one employer for the full tax year.
- They have no other form of income, such as a car allowance, business income, rental income, taxable interest or income from another job.
- They don’t have any additional allowable tax-related deductions to claim, such as medical expenses, retirement annuity contributions and travel expenses.
“It is a large increase,” explains Prof Herman Viviers from the North-West University (NWU). “People should be very wary to not simply ignore filing their normal tax returns as there is always the possibility of getting a tax refund due to additional tax deductions and/or tax credits only allowed upon assessment.”
Prof Viviers also mentions that, although individuals may earn less than R500 000 a year, they should take into account their retirement annuity fund contributions and allowances (received from an employer). These usually result in additional deductions to be claimed upon assessment, which could result in a possible tax refund.
“The main reason for SARS lifting the threshold is that it lessens their administrative burden of processing tax returns from the lower income-earning group. The fewer returns submitted, the less admin for them. It also holds the same administrative benefits for the taxpayer. But, as I said, individuals should be cautious.”
If uncertain, individuals should consult a registered tax practitioner as the non-submission of tax returns could result in non-compliance penalties to be levied in terms of the Tax Administration Act.
South African Tax Guide: https://www.sataxguide.co.za/sars-lifts-tax-return-threshold-from-r350-000-to-r500-000/
North West University News: http://news.nwu.ac.za/sars-lifts-tax-threshold-taxpayers-must-be-cautious
Business Tech: https://businesstech.co.za/news/finance/321707/sars-has-changed-the-rules-for-tax-returns-in-south-africa-heres-3-other-things-you-need-to-know/