Good news for SARS tax refunds

The South African Revenue Service (SARS) says that it has processed 90% of tax refunds that were inexplicably reversed this week, with the remaining 10% to be finalised by Monday, 29 July.

The revenue service apologised for the “challenges” it experienced regarding tax refunds this week, where some taxpayers were paid out a refund and then had it immediately reversed.

It noted that 30,000 taxpayers were affected by the reversal.

“Due to the risk associated with the validity of refund payments, all refunds go through the validation process with all stakeholders in the tax ecosystem. These validations could result in refunds being flagged for verification,” it said.

By Friday, SARS said it had worked through most of these validations and 90% of them had been processed and released.

The remaining 10%, it said, would either be released by Monday, or the affected taxpayers will be “engaged” to provide supporting documents where necessary for the funds to be released.

“These are the normal processes in the validations of refunds. Notwithstanding the above challenges, SARS has, in line with its earlier commitment, paid out 83% of all refunds within 72 hours,” it said.

“SARS sincerely apologises to all taxpayers for the inconvenience caused in this validation process.”

Since the beginning of the Filing Season, SARS has paid out in excess of R14 Billion to 1.5 million taxpayers.

Demands you can’t ignore

Taxpayers who have had their refund reversed and need to provide documents to SARS should be aware that this is a request that cannot be ignored and is necessary to remain tax compliant.

Tax experts at Tax Consulting SA recently outlined the demands from SARS that have to be met in order to stay on the right side of the law.

These include:

• Filing Your Taxes: The most relevant for the tax season overall, is remembering to file your taxes. This is a legal requirement for all persons (with a few exceptions), and failing to do so will have serious consequences, including accrued penalties.

• Request for relevant material: When SARS requests additional information, taxpayers must comply promptly and within the permissible timeframe provided by SARS. Failure to do so will again result in taxpayers being in violation of the law.

• Final Letter of Demand: Failure to respond to a final demand for payment of outstanding taxes can result not only in the sheriff of the High Court paying you a visit, but also potential jail time – taxpayers have 10 business days to comply.

For those taxpayers who have not yet filed their tax returns, there is still time. Tax season for individual taxpayers closes on 21 October 2024. For provisional taxpayers, the window is open until 20 January 2025.

Taxpayers are required to submit a tax return to SARS so that the revenue service can calculate their tax liability based on the income they declare and the tax-deductible expenses they have incurred for a year of assessment.

In some cases, the process may result in a refund to the taxpayer—in other cases, taxpayers might be liable for additional tax payments to SARS.

Taxpayers can complete and submit a tax return to SARS via the following channels:

• eFiling on your computer – by registering for eFiling at www.sarsefiling.co.za
• The SARS MobiApp from which you can complete and submit your Income Tax Return (ITR12).
• Filing electronically at a SARS branch where an agent will assist you
• Requesting a return to be posted to you and completing your return manually and submitting it at a SARS branch.

SARS favours the first two approaches, and has been working to make it easier to file electronically over the years.

If taxpayers need to go to a branch, they must remember to bring along all supporting documentation – and to make an appointment​ before going in.

Key filing dates

Read: 3 lifelines to help you avoid trouble with SARS