This year's tax season is upon us. Have you submitted your tax return yet? If you earn more than R350 000 a year, you qualify for tax return submission.
Nowadays, The South African Revenue Services (SARS) is making it easier for you to file your tax return by creating an eFiling system. But why do we have to submit our tax returns? We did some investigating and have four valid reasons why your should be submitting your tax returns.
More often then not you might get a tax refund on your submission. The reason for this is because you might have paid more tax than you were required to so SARS refunded you. There is nothing more exciting than getting a little cash back for doing nothing.
If you are working for a new company and haven't been taxed for the whole tax year, this being from March to February, you would be considered to be paying too much tax. The way this works is that the company works out your annual earnings and then taxes you a percentage of that according to the tax table. A company will do this regardless of whether or not you have been working the entire tax year. This means that you are paying for earnings that do not fall under the particular tax year. With this being said, SARS is aware of the period in which you have been working at the company. They then think that you have paid too much tax so they will provide you with a refund. If you incur extra expenses like travel mileage or have a retirement annuity, you might receive a refund.
A Tax Clearance Certificate (TCT) is a good reason to ensure that you submit your tax returns. SARS issues this certificate to everyone whose tax is up to date and paid on time. If you have not been declaring your tax or have been paying late, SARS will withdraw the clearance on your name.
If you are wanting to take out a loan or a bond, the bank will look over your tax payments. If you have not paid your tax properly, you might be denied a loan. If you are looking into foreign investment or immigration, then its best to ensure that your tax returns are paid in order to do what you want to do.
Not submitting your tax return can definitely prove to cause all-round havoc to your personal welfare and your pocket. You will receive various penalties if you choose to submit your return late, don't submit it at all or declare the wrong amounts. This could land you in deep trouble and could prevent you from ever receiving a Tax Clearance Certificate and having a good tax record.
Submitting an accurate and timley return can reduce the risk of a SARS audit. All you need to do is ensure that you submit the right information and at the right time. In this case, SARS will have no reason to think that you are up to anything sneaky. They could even potentially trigger an audit the following year. So at the end of the day, its best to just submit your returns and reap the benefits thereafter!