Gigi Nyanin | Project Director | Tax Publications and Thought leadership | South African Institute of Chartered Accountants (SAICA) | mail me |
In August 2020, the South African Revenue Service (SARS) introduced auto assessments which provided them with the ability to file income tax returns on behalf of taxpayers.
These auto assessments are populated from a taxpayer’s information which is collected from third parties such as financial institutions, employers, and medical aid schemes.
At the commencement of the 2020 filing season, it was indicated that where taxpayers have not accepted or amended the auto assessments by the due date, SARS would proceed to issue an estimated assessment based on the information at their disposal.
The issuing of estimated assessments
During February 2021, SARS sent reminder SMSs to taxpayers noting that these estimated assessments will be issued on 19 February 2021.
With the deadline for the 2020 filing season having come and gone, SARS has noted that it will commence with the issuing of estimated assessments to persons who fall in this category.
Most importantly, where taxpayers file a return after this date, they would, as a matter of course, be subject to a late submission penalty.
When SARS started sending the reminder SMSs, we were made aware of anomalies where auto assessments were either accepted or edited and despite this, these taxpayers were still receiving the reminders.
There were also incidences where returns were submitted, but assessment was delayed by the SARS system and there were incidences where such taxpayers were also receiving this SMS.
Avoiding the imposition of a late submission penalty
We raised these concerns with SARS, but unfortunately, we have not received any feedback at the time of writing this article.
Taxpayers who have not accepted or amended an auto assessment are requested to do so urgently in order to avoid the imposition of a late submission penalty or an estimated assessment against which you would need to dispute, if you disagree with it.
What is unclear, however, is the recourse available to the taxpayers who have, for instance, received the SMS because their returns are reflecting as un-submitted on the SARS system even though they were submitted by the tax practitioner and are now held ‘in limbo’ because of the delayed assessment. We will keep the public updated of any news in this regard.
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