Background
All individuals that are South African Tax Residents and that earn taxable income, in the form of a salary or otherwise, are liable to pay tax on their personal taxable income should it exceed the annual thresholds as defined by SARS. An individual’s tax liability is calculated by submitting an annual Personal Income Tax Return (ITR12) to SARS.
The importance of being in Good Standing with SARS
Being in Good Standing with SARS is like being on good terms with your mother-in-law – not everyone is keen on the effort, but it will be to your benefit. Thinking of buying a new car or new house? Applying for a personal loan or credit card? Then being in Good Standing with SARS should be on the top of your list as it can have a negative impact on your credit score and have debt collectors knocking on your door should you end up on the wrong side of SARS.
The consequences of non-submission
SARS may impose penalties and interest, followed by legal action, should you refrain from submitting your returns timely and accurately. If you submit long past the due date, you will more likely than not get audited by SARS and that can be a costly and time-consuming process to complete. Furthermore, a tax refund could be due to you, but should you not submit your returns, those refunds will never get paid back to you.
Auto Assessments
Most individuals only receive income from a single source or employer and are likely to be Auto Assessed by SARS. Although this saves you the time of completing and submitting a return, SARS can make mistakes and pre-populate your return with incorrect or incomplete information. This could lead to the overstatement of your tax liability, and no one wants to pay more tax than what they are truly liable for! It’s therefore a good idea to review your Auto Assessment and ensure that it’s correct. If you’d like to be 100% sure – get an Accounting Professional to review it for you.
Close-off
So, avoid the inconveniences related to non-submission and not being in Good Standing and submit your Personal Income Tax Return. And, if you’re lucky, you might even receive an early bonus in the form of a refund. Remember, filing season closes on 21 October 2024 – So submit now!