Industry updates | May 2024
Please take note of the following industry updates that may be relevant to you and your business.
COMPLIANCE AND ADMINISTRATION
Due dates for reporting and payments- May 2024:
TAX ADMINISTRATION
Reminder on employer Annual Declarations (EMP501): 1 April to 31 May 2024
1. The Employer Annual Declaration period commenced on 1 April and will close on 31 May 2024. During this period, employers must submit their annual reconciliation declarations (EMP501) with accurate and up-to-date payroll information about their employees. The EMP501 must include:
Monthly employer declarations (EMP201) for PAYE, Unemployment Insurance Fund contributions (UIF), and the Skills Development Levy.
Information about payments made (excluding penalties and interest paid).
Employee tax certificates (IRP5/IT3(a) generated) covering the tax year from 1 March 2023 to 29 February 2024.
To ensure that an EMP501 has been successfully filed with SARS, it is vital to monitor the status of submissions. As a result, if a submission is rejected because it is incomplete or has a data error, it is considered not to have been submitted, and you will be liable for non-compliance penalties.
Submitting an incomplete EMP501 or submitting an EMP501 after the due date will result in administrative penalties, amounting to 1% of the year’s PAYE liability. This penalty increases by 1% monthly, reaching up to 10% of the year’s PAYE liability.
2. SARS’ 2023/2024 preliminary revenue results
On 2 April 2023, SARS announced the 2023/24 preliminary revenue collection results, which reflected an unexpected growth despite the projections made by the Minister of Finance in the budget. SARS also recorded the highest revenue collections since the dawn of our democracy. For context, over the last 4 days of March 2024, SARS collected over R114 billion which was about the same amount collected throughout 1994/95.
For the first time since its inceptions, SARS collected a record gross amount of R2.155 trillion. As of 31 March 2023, the net collection amount was R1.741 trillion after accounting for the R414 billion in refunds paid to taxpayers between 1 April 2023 and 31 March 2024.
The achievement of R1.741 trillion represents year-on-year a growth of 4.6% against a nominal GDP growth of below 1%, which is a decrease from the 7.86% growth achieved during 2022/2023 fiscal years. Although a growth was recorded, several concerning factors were identified which still hinder revenue collections. Amongst others, electricity supply and loadshedding continues to affect business growth and profitability. Additionally, logistical challenges at South African ports continue to affect trade and the economy’s growth.
Tax crime and debt recovery also remains a concern globally. Notwithstanding, SARS was able to successfully stop R101 billion in fraudulent refunds and successfully prosecuted many of these cases.
voluntary compliance has grown from 61.6% to 63.9% from the 2022/23 to 2023/24 fiscal years. According to a SARS survey, public confidence in SARS has also increased from 71.8% to 77.5%.
The SARS Commissioner, Edward Kieswetter, also highlighted some concerns around delinquent tax practitioners. Tax practitioners are still considering key stakeholders within the tax ecosystem. That stated, tax practitioners, as tax advisors to taxpayers, are held to higher standards due to their influence over taxpayers.
As of 31 March 2024, 53 registered tax practitioners remained non-compliant in their personal taxes. Eight of these tax practitioners were deregistered and some have criminal investigations ongoing against them. Also concerning is the underestimation and payment of taxes by tax practitioners. To illustrate this, SARS Commissioner indicated that over 14 law firm partners were underestimating provisional taxes and were required to top-up after paragraph 19(3) revisions were made.
Notwithstanding all the challenges, the SARS Commissioner has thanked all compliant taxpayers and traders for contributing to this significant revenue outcome, including:
• Over 62 million citizens who contribute to VAT;
• 28 million registered individuals and trusts;
• 4 million companies;
• 1 million VAT vendors;
• 650 000 employers; and 380 000 traders
3. The 2024 Tax season for individuals opens in July
The 2024 tax season for individuals opens in July. Submissions of personal tax returns (IT12s) for the 2024 tax season will commence in just 2 months' time.
Individual taxpayers are urged to begin gathering information related to income earned and all deductions and expenses they intend to claim in their returns.
This submission pertains to the period from March 2023 to February 2024.
SARS will scrutinize all individuals claiming expenses and deductions, so please ensure that your supporting documentation complies with SARS requirements.
Domonique Ramos | 03 May 2024