Using SARS's eFiling website will prepare individual taxpayers for the day when it will be possible to submit your tax returns electronically.
Taxpayers and traders send the South African Revenue Service (SARS) between 65 000 and 75 000 incorrectly referenced electronic payments every month. If your electronic payment is incorrectly referenced, your payment may not be allocated correctly and your account may not be settled.
While you may be thinking that your payments are all up-to-date, SARS could be sending you a demand or summons and imposing penalties and interest, all because the payment you made hasn't been matched to the return you submitted and what you owe.
Setting the record straight may then become a frustrating exercise for you.
In an attempt to overcome these problems, SARS has developed a payment channel on its eFiling website ( www.sarsefiling.co.za).
Anyone who has internet banking with one of the four major banks - Absa, First National Bank (FNB), Nedbank or Standard Bank - can use the site to make payments from their account at one these banks.
If you use the eFiling payment channel, your payment will be validated and there will be little room for error. You do not need to register on the site to use the payment channel. To make a payment, hit the big red button labelled "Tax payments". You will have to enter your tax reference number and your contact details and state what type of tax you are paying. These details will be verified before you proceed.
The next step in the process will link you to your bank and your account. From there, the pages will probably look quite familiar, but you won't have to enter your tax details again.
Taxpayers who have been paying SARS from an internet banking account and have SARS as a beneficiary, can continue to pay SARS in this way.
Adrian Lackay, a spokesperson for SARS, says SARS has no intention to stop people paying their tax in this way. You can also continue to make direct deposits into SARS's account at FNB, or pay by cheque, but there are obvious advantages to paying electronically.
In July, Standard Bank sent its clients a letter stating that because SARS was promoting the free eFiling system, clients would no longer be able to pay SARS through internet banking and SARS-related beneficiaries would be deleted from their accounts.
Standard Bank later retracted this statement in another letter notifying clients that electronic payments to SARS would be accepted via internet banking until further notice.
Lackay says SARS would prefer taxpayers to use the eFiling service, but it cannot expect taxpayers not to use the payment transfer systems of their banks. For these reasons, he says, the eFiling service has been developed in co-operation with the commercial banks.
Electronic submission of returns
Lackay says using the eFiling website will prepare individual taxpayers for the day when electronic submission of their income tax returns is possible.
He says that since the eFiling service was launched in September 2003, it has been SARS's ambition to
extend the service to include individual income tax returns. "However, the feasibility of this option is still being investigated as there are some real technical challenges," Lackay says.
"Extending the service to include personal income tax returns would also have to take into account levels of access ordinary South African taxpayers have to the internet, general levels of literacy, as well as the submission of supporting documents - IRP5, medical scheme certificates, and so on - which normally accompany tax returns as a motivation for claims."
So, while as an individual income taxpayer you can't use the site to submit your return yet, you can use the eFiling site to make payments, to request tax directives and tax return deadline extensions.
Tax calculator
The eFiling website also offers individual income taxpayers access to a tax calculator that you can use to check your tax calculation, and there is a link to a PowerPoint presentation that shows you step-by-step how to complete your tax return. Follow the "Individual tax returns not yet available" link from the home page of the eFiling site.
Currently, the returns that can be "efiled" or completed online are: PAYE, Skills Development Levy, Unemployment Insurance Fund, VAT, provisional tax, transfer duty, stamp duty and trusts.
A pilot phase for IT14s - that is, annual income tax returns for businesses - has been launched, and SARS hopes to extend efiling to Secondary Tax on Companies soon, Lackay says.
To efile one of these tax returns, you need to register on the site and within 24 hours you will be able to use the services on the site.
Initially, SARS outsourced its efiling services to five companies who charged taxpayers for the service.
In September 2003, SARS bought the intellectual property of three of the companies that operated the fee-based efiling services and started offering the services for free.
At the time, Finance Minister Trevor Manuel said the change was consistent with international best practice and with the Receiver's strategy to encourage electronic transactions. This means that efiling and using the eFiling payment channel is free, although your bank will still charge you for the cost of an electronic payment from your account.
The original SARS site
Taxpayers may also find useful information on the original SARS website at www.sars.gov.za. For example, if you have sold shares or unit trusts that you bought before capital gains tax was introduced on October 1, 2001, you may be looking for the market value of these investments that you can use as the base cost for the purposes of calculating your capital gain.
The market value of listed financial instruments on October 1, 2001 was determined by SARS based on the average of the last price quoted for these instruments on the relevant exchange at the close of business on each of the five days preceding that date.
The values were published in the Government Gazette. Personal Finance magazine also published these figures in volume 9, 4th Quarter, 2001.
But if you don't have access to either of these sources, you will find the figures on SARS's website.
On the home page choose the "CGT" section from the left-hand navigation bar and then choose "Information". There you will find a section called "Unit trusts", which will lead you to the unit trust prices as at October 1, 2001.
The section called "Value of listed financial instruments for capital gains tax purposes" will take you to a page offering the values of equities, warrants, financial futures and agricultural futures. Choose "Equities" to get a list of share prices as at October 1, 2001.
Clicking on this link will download an Excel file with the market value of all the share prices for CGT purposes as at October 1, 2001.
If you have sold foreign shares or unit trusts, you may need to look up rates of exchange on October 1, 2001. You can get these rates from the "Information" page in the "CGT" section.
Rates of exchange for dates other than October 1, 2001 used by SARS can also be accessed from the home page of the site.
Other useful brochures available on the SARS website include:
- A brochure explaining the tax implications for non-residents. It is available from the home page.
- A brochure on SARS's alternative dispute resolution process. This offers taxpayers a quick and inexpensive way of dealing with disputes they have with SARS about their tax returns. Follow the "More publications" link on the home page.
- Brochures on CGT. For example, "CGT - The ABC of Capital Gains Tax for Individuals Booklet", "Frequently Asked Questions on CGT", "The CGT Pocket Guide" and "The Draft CGT Comprehensive Guide", which was released earlier this year. Follow the "CGT" link from the home page.
- A tax guide for small businesses. It is available from the home page.
This article was first published in Personal Finance magazine, 4th Quarter 2005. See what's in our latest issue