taxpayers won't need a manual
10 May 2007

Taxpayers will have until October 31 to submit their returns this year using a new, much-easier system, said Finance Minister Trevor Manuel on Wednesday.

SARS has not only cut down on the number of tax returns, but has significantly simplified them - particularly the two for individual tax. "I might even chance my hand at this one myself," Manuel told company senior executives and SARS top management, joking that the new system might put his tax consultant out of business.

The new forms for individual tax are the two-page IT12S (for simple), for the 3.5 million taxpayers earning basic income and standard allowances, and the five-page IT12C (for complex), for those earning additional income.

Taxpayers also will no longer have to attach supporting documentation - such as IRP5s, IT3s, bank statements, medical receipts, logbooks and petrol slips. However, they will have to make use of the information in these documents in their returns and keep them for five years in case SARS decides to audit them.

SARS had an estimated half-a-billion pieces of paper in its 90 offices, said SARS commissioner Pravin Gordhan. "Some floors were beginning to crack because of the weight of the paper," he said. Under the new system, taxpayers will not have to do any calculations either. While they will be told how to do the maths, that responsibility will rest with SARS.

However, returns will be sent back to taxpayers who have not signed them or completely them incorrectly - placing them at risk of penalties of up to R300 for late submission.

"We're going to end up with a situation that is substantially easier," said Manuel. So easy, in fact, "you won't even need a manual", a SARS advertisement in its massive education campaign for the new system says.

The number of registered taxpayers increased from 2.7m in 1997 to 4.8m in 2003, to nearly 7m in 2007, and is expected to grow to 10.5m by 2010.

"If you grow at this kind of rate, the scale of administrative burden is enormous... the scale of it is just quite impossible," said Manuel.

The non-compliant will be detected through layers of controls, including the cross-referencing of their information with that which institutions such as employers and banks provide to SARS.

Returns will be posted to taxpayers from mid-July. They will also be available on the SARS e-filing website, from employers and at SARS offices.  He said 30 000 taxpayers filed electronically last year, but that was when only simple tax returns could be filed electronically. This year, e-filing would apply to all returns.

Even if they did not, SARS expected that the system would ensure greater efficiency and improved turnaround times in the capturing, verification and assessment of taxpayer information.  While it would also mean quicker refunds, payments would no longer be made by cheque, but electronically, directly into bank accounts.

SARS said this was the start of a three- to five-year bigger strategic programme, which would include changes to the returns for companies, trusts and exempt institutions.

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