SARS will start issuing ‘auto-assessments’ to taxpayers later this year – here’s how it works

The South African Revenue Services (SARS) will start issuing auto-assessments from 1 August.

In May, SARS commissioner Kieswetter indicated that a significant number of taxpayers will receive auto-assessments and given an opportunity to confirm their acceptance of the assessment outcome according to SARS.

In an emailed response, a SARS spokesperson said that these auto-assessments were first implemented in 2019 for a limited number of taxpayers, but will now be rolled out to a wider range of people.

The process will work as follows:

  • Employers and third-parties submit required and correct data to SARS by end of May 2020;
  • SARS uses the relevant data to identify taxpayers who can be auto assessed;
  • SARS auto-assesses the taxpayer and issues an SMS to the taxpayer with the results;
  • Taxpayer logs onto eFiling or SARS MobiApp and accepts the auto-assessment results;
  • If there is a refund, the refund is processed and paid out to a valid bank account (if the bank details with SARS are invalid – SARS will not be able to pay the refund);
  • If the taxpayer does not agree with results of the auto-assessment, they may edit and resubmit their income tax return on 1 September 2020.

“SARS will use the tax-related information submitted by third parties such as employers, banks, and other financial institutions,” a spokesperson said.

“It is of the utmost importance for taxpayers to ensure that their employer and third party institutions have submitted accurate data such as IRP5 certificates and medical or insurance tax certificates with which to submit their income tax return.”

SARS said that taxpayers who are auto assessed have two options:

  • Accept the results on eFiling or MobiApp and if there is a credit, the refund is processed and paid;
  • Disagree with the auto assessment and edit the return by supplying the relevant or missing information to resubmit on 1 September.

Why is SARS moving to auto-assessments? 

During the state of disaster and lockdown period in March, SARS fast-tracked the online conversion of a number of services that prompted a branch visit, to facilitate taxpayer compliance and revenue collection during this challenging but critical time for the country’s revenue income.

The revenue collector said it has taken further steps to provide an end-to-end service to taxpayers.

“This includes a seamless filing season, which began with employer filing in April this year, and verification of employer and third party data which commenced on 1 June, followed by automatic assessments of taxpayers on 1 August,” it said.

“It is expected that these innovations will enhance our service to taxpayers, and improve their tax filing experience.”

SARS added that the auto-assessment process is not new and was introduced last year.

“This year, it has been leveraged to accommodate a larger number of taxpayers. Notices to taxpayers will be sent through an SMS commencing 1 August notifying that they have been automatically assessed.

“The auto-assessment will be based on the available third party information from employers, banks and financial services companies, which administer retirement fund and pension schemes, Medical Savings and Insurance Schemes, submit tax certificates.”

The tax collector emphasised that it was important for taxpayers to update and verify their personal information and banking details.

“Updating of personal information including banking details can take place on eFiling and the SARS MobiApp (see link to letter on 25 March and statement on 05 May for online services). Refunds will only be paid into a valid bank account.

“If the bank details with SARS are invalid, SARS will not be able to pay the refund. This is why taxpayers must verify their details with SARS and ensure that their IRP5 and other relevant data  has been submitted by their employer and third parties, and properly captured during the period June and August.”

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SARS will start issuing ‘auto-assessments’ to taxpayers later this year – here’s how it works