Tax season is upon us, and as individuals and businesses prepare to navigate the complexities of filing taxes, it’s essential to stay abreast of the latest developments from the South African Revenue Service (SARS). Here’s a concise summary of the key changes and news shaping the tax landscape in 2024.
- Leveraging Technology for Enhanced Compliance
SARS is embracing digital transformation, harnessing machine learning and artificial intelligence to streamline tax processes and improve compliance. Taxpayers can expect increased automation in filing taxes, with online portals and digital platforms facilitating easier compliance.
- Focus on Trusts and Beneficial Owners
New legislation mandates trusts to disclose detailed information about beneficial owners to increase transparency and combat tax evasion. Trusts now have an extended filing period, starting from 16 September 2024 to 20 January 2025, to ensure compliance with amended regulations. Key documents include the beneficial ownership declaration page and additional mandatory supporting information.
- Scrutiny on Foreign Employers
Foreign employers operating in South Africa must now withhold and pay PAYE, aligning provisions to ensure consistency between resident and foreign employers. This change, effective from 22 December 2023, impacts foreign employers with a South African permanent establishment.
- Targeting New Industries
SARS is eyeing e-commerce and independent energy production sectors for enhanced revenue collection. Taxpayers in these sectors should anticipate increased scrutiny and ensure compliance with tax laws to avoid penalties. SARS aims to develop strategies to optimise tax collection from online transactions and alternative energy sub-sectors.
- Holding Banks and Tax Practitioners Accountable
SARS is imposing greater responsibility on banks and tax practitioners to prevent financial crimes and ensure compliance. Financial institutions and tax professionals must strengthen compliance measures to mitigate risks and avoid potential penalties. SARS Commissioner Edward Kieswetter emphasises the need for proactive measures to combat organised corruption and financial crimes.
- High Net-worth Individuals (HNWIs) in the Crosshairs
HNWIs face increased scrutiny, with SARS deploying advanced technology to streamline audits and ensure compliance. SARS requests detailed computations and income forecasts, signalling a shift towards more targeted enforcement actions. The HWI Unit focuses on complex tax affairs, requesting detailed computations and income forecasts for the next six months.
- Crypto Traders under the Radar
SARS extends its reach to crypto traders, requiring accurate reporting of crypto-related income and transactions to avoid potential penalties or enforcement actions. Crypto assets are considered financial instruments under the Income Tax Act, and profits from trading are subject to taxation.
- Compliance Programs for SMMEs and Company Directors
SMMEs and company directors are under pressure to ensure compliance with tax laws. SARS is piloting a compliance program targeting non-compliant behaviour among SMMEs and holding company directors accountable for their tax obligations. Failure to comply with tax obligations may result in fines, penalties, or imprisonment for directors.
- Medical Aid Tax Changes
SARS implements tax changes related to medical aids to simplify data submission and reduce audits for taxpayers with complex medical claims. Effective September 2024, medical aids are expected to provide requested data in line with updated requirements. Taxpayers must ensure accurate reporting of medical expenses in their tax returns.
- Vigilance against Scam
Taxpayers must remain vigilant against scams targeting them during tax season. SARS warns about fraudulent emails and messages impersonating the tax authority, urging taxpayers to verify the authenticity of communications and report any suspicious activity.
Stay informed about key 2024 Tax Season dates:
- Individual taxpayers (non-provisional): 15 July 2024 to 21 October 2024
- Auto-assessment notices: 1 – 14 July 2024
- Provisional taxpayers: 15 July 2024 to 20 January 2025
- Trusts: 16 September 2024 to 20 January 2025
As tax season unfolds, compliance and transparency remain paramount. By staying informed and adhering to compliance requirements, taxpayers can navigate the tax landscape effectively and contribute to a fair and transparent tax system.