With tax season officially opening in South Africa on 15 July 2024, provisional taxpayers who did not agree with their auto-assessments have until 21 October to file their taxes.
Taxpayers must submit a tax return to SARS so that the revenue service can calculate their tax liability based on the income they declare and the tax-deductible expenses they have incurred for a year of assessment.
That said, Tax Consulting SA said that many find themselves in a precarious position where they only find out that they owe SARS money once it is taken from their bank account by the taxman.
Tax Consulting SA looked at how taxpayers can ensure that this never happens to them.
Firstly, South Africans have to understand tax law. As a South African taxpayer, it is your responsibility to make sure that your taxes are up to date.
“Even where you use a professional, have gone into SARS to do your taxes or consider yourself capable enough to handle your own tax affairs, there are just so many things which can happen that cause you to owe SARS money,” said the tax experts.
“We see most SARS unknown debts arising from SARS assessments which are AI-generated or where a taxpayer was inadvertently non-responsive to a SARS message.”
“Once there is a tax debt, and you have not followed the correct procedures to protect yourself, the law is clear - pay now and argue later.”
Secondly, taxpayers must determine the status of their tax compliance. This can be done on one’s SARS eFiling profile.
That said, most taxpayers are only able to determine whether there is a judgment against them when applying for credit or performing a credit check, which looks like the following:
“As a tax firm, we do not like surprises, so we use www.taxcheck.co.za to verify this for our clients automatically. Employers use the same system to determine the compliance of their employees with tax, as it provides accurate information and this does not breach taxpayer confidentiality rules.”
There are also potential severe consequences of a SARS Tax Judgement.
“If you do not know already that you can owe money to anyone but the taxman, some life lessons can only be learned from personal experience.”
“One particularly challenging aspect is the SARS judgement and Certified Statement, which can lead to severe consequences like wage garnishments, asset seizures, and a negative impact on credit ratings.”
SARS judgements and certified statements are strong legal instruments that the taxman utilises to ensure the collection of outstanding tax debts.
If a taxpayer fails to meet their tax obligations, SARS can obtain a judgment that can result in the insurance of a certified statement, essentially acting as a civil judgment.
That said, taxpayers could have some hope as the SARS can withdraw a certified statement if the taxpayer follows the correct legal avenues.