Even though the 2023 tax season does not start until Friday 7 July, the South African Revenue Service (SARS) has already started issuing auto-assessments and issuing refunds to some taxpayers who are not even aware that they have been auto-assessed or had the opportunity to make changes to their tax returns.
Taxpayers who are automatically assessed by SARS should not simply accept this as it may result in them losing their full refund or even not receiving a refund at all even if they are entitled to it.
“If a taxpayer received an auto-assessment and refund before any changes could be made, a tax return can still be submitted as normal when the tax season has officially started and there is additional information that needs to be updated and taken into account,” says Thys van Zyl, Head of Product Development at Everest Wealth. “It may be wise to instead keep the refund aside until the amended version has been processed.”
Taxpayers have until Monday 23 October to submit their tax returns.
By still submitting a tax return, taxpayers can ensure that all deductions are indeed included in order to pay less tax and receive a refund. “The auto assessments do not include any additional allowable tax deductions such as additional medical expenses, donations, home office or travel allowance deductions. There are definitely risks in just accepting an auto-assessment as it could mean you get less back than you’re supposed to or you could be penalized later because other important information, such as additional income, wasn’t declared.”
Everest Wealth earlier pointed out that individual taxpayers bear a heavy burden. There are several ways to reduce your tax liability within the law and increase your chance of a refund.
“South Africa has a very high income tax burden relative to other countries, with just over 2.5 million people paying 84% of all personal income tax. Taxpayers should be well aware of all the ways to reduce tax liability. Some of the tax deductions involve complicated calculations and it can benefit taxpayers to get an expert to help with this.”
Many taxpayers are also in effect paying double as they have to obtain private services because the government does not provide the services for which tax money should be used. These include privatized security services and privatized medical services.
“Just as it is every taxpayer’s duty to ensure that their tax return accurately reflects all income and expenses, they must also check whether they should receive a refund if they have paid too much or qualify for rebates.”
Taxpayers are fed up with corruption, the misuse of their tax money and the government that thinks taxpayers are a cow that can be milked endlessly.
“Taxpayers have to watch every month how a large part of their hard-earned money is taken by the government and in return they get no or poor services while there are almost daily reports of how taxpayers’ money is stolen or wasted. It is therefore only right that taxpayers ensure that they take advantage of possible concessions and do not pay more than is necessary.”