Filing Season 2021 for employers, during which they must file the annual Employer Reconciliation Declaration (EMP501), opens on 1 April 2021 and closes on 31 May 2021. The EMP501 must reflect accurate payroll information about their employees, employees’ tax (PAYE) payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March 2020 to 28 February 2021.
The COVID-19 pandemic has had a severe impact on tax revenue collection. Given large predicted shortfalls in revenue for 2020/21 and over the next three years, the 2020 Medium Term Budget Policy Statement (MTBPS) confirmed that tax increases totalling R40 billion would be required over the next four years to help stabilise public debt and return the public finances to a sustainable position. These increases were first announced in the June 2020 special adjustments budget.
Government is reducing the number of tax incentives, expenditure deductions and assessed loss offsets, with the aim of lowering the corporate income tax rate over the medium term. These changes are expected to enhance efficiency, transparency and fairness in the business tax system, while facilitating economic growth through improved investment and competitiveness.
Personal income tax accounts for about 40 per cent of total tax revenue. In response to extreme levels of inequality, South Africa’s rate structure is highly progressive and covers tax residents’ worldwide income. South Africa has the highest personal income tax share among upper middle-income countries, alongside one of the highest top personal income tax rates.
Tito Mboweni’s big day looms next week, with little progress on the medium-term budget policy speech. The biggest issue relates to the freeze on government wages to which there has been no resolution yet. Let’s hope that we get finality in the upcoming budget.
(Extract from the Medium Term Budget Policy Statement)
In terms of Disaster Management Act relief measures, three payment dates still apply:
With the intention of making it easier to comply with tax obligations, SARS is embarking on an outbound call campaign to assist taxpayers to file their tax returns virtually, either by a telephone or video call.
A good start to the new year when the Reserve bank announced a surprise reduction of 25 basis points to the repo rate. Good news for those with borrowings and the forecast is that we should get another cut in the 4th quarter 2020.
South Africa will be holding its breath at 14h00 Wednesday 26th February 2020 as Minister Mboweni presents his Budget for the 2021 financial year. There literally can only be bad news as the whole country is going to be affected by whatever reforms will be announced, but without these reforms South Africa will undoubtedly fail, so we need to make short to medium term sacrifices. There will be increased taxes, what shape or form is anyone’s guess. But this needs to be accompanied with a reduced Government wage bill and holes plugged in our leaking State-Owned Entities.
Large fiscal deficits incurred over the years, although providing short-term support to the economy, have not resulted in commensurate long-term economic growth. This has led to sharp increases in the government’s debt-to-GDP ratio, which currently stands at 60.8 per cent, and is expected to rise to 71.3 per cent in 2022/23. The growing proportion of limited public resources spent on interest payments are crowding out spending on social and economic investment.
The 2019 MTBPS has been presented by Minister Tito Mboweni. His opening statement was a reference to the Aloe Ferox plant he brought to Parliament when presenting the February 2019 budget.
Unlike conventional trusts, which are taxed at a flat rate of tax, a special trust is taxed on the same sliding scale applicable to natural persons. For tax purposes the following types of special trusts are recognised:
Did you receive an SMS from SARS showing your tax calculation?
This year taxpayers who meet ALL the following criteria need NOT submit a tax return:
With the imminent introduction of Carbon Tax, it is important to know how this will affect your business. While your business may not be directly affected by the tax, your suppliers may well have to pass on additional costs incurred as a result of it. So, let’s explore who and what will be subject to the tax.
A number of clients often have difficulty accessing SARS documents on the eFiling system. This is mainly due to incompatible browsers. The SARS eFiling website is optimally viewed in Internet Explorer (IE) versions 8+ browsers.
The carbon tax will be implemented on 1 June 2019. It gives effect to the polluter-pays principle, prices greenhouse gas emissions and aims to ensure that businesses and households take these costs into account in their production, consumption and investment decisions. The tax will assist in reducing emissions and ensuring South Africa meets its commitments under the 2015 Paris Climate Agreement. It will be reviewed after three years.
The employment tax incentive was introduced on 1 January 2014 to share the cost of hiring young, inexperienced workers between employers and government. The incentive was reviewed and extended in 2016 and 2018. The most recent review found that the incentive’s positive benefits are more pronounced in small firms.
THE TAX ADMINISTRATION ACT THE ADMINISTRATIVE UMPIRE FOR UNREASONABLE DELAYS BY SARS SOMETIMES IT JUST DOESN'T SEEM FAIR. PUNITIVE MEASURES AGAINST TAXPAYERS ARE SWIFT AND STRESSFUL. WHAT MANY TAXPAYERS DON'T KNOW, IS THAT THE TAX ADMINISTRATION ACT TAA HAS THE ROLE OF ADMINISTRATIVE UMPIRE, ENSURING THAT SARS, TOO, PLAYS FAIR. SARS NEEDS TO BE EFFICIENT, ECONOMIC AND EFFECTIVE; ACT IMPARTIALLY, FAIRLY, EQUITABLY AND WITHOUT BIAS. AND NO, SARS MAY NOT BE SLOW FOOTED CAUSING UNREASONABLE DELAYS The South African Revenue Service SARS , as part of a move to boost its revenue collection, is reportedly looking to nail 300 000 companies with penalties for failure to submit corporate income tax returns It is therefore important to know your rights and how to deal with unreasonable delays, and in this article, I give an overview of the rules, the penalties and the route to justice when SARS are totally out of line. STATUTORY RULES GO BOTH WAYS The Tax Administration Act TAA is vocal about the…
The beginning of a new year is as good a time as any to review your estate plan. More specifically, it is important to make sure all your affairs are in order from an administrative point of view. As part of your estate plan it is important that you make sure that inter alia the following documents are easily available: