Tax returns: South Africans do it online

While it might be going too far to claim that South Africans love paying their taxes, it is safe to say that they love doing it online. According to SARS, last year over 86 percent of tax returns were done digitally, either by individuals logging onto the SARS web site or with the help of officials at the SARS branches. 

SARS stands for South African Revenue Services, an acronym that gave rise to countless jokes at the peak of the SARS bird flu virus. Joking and the natural antipathy towards taxes aside, it has to be said that SARS is one of best – if not the best – functioning government bodies in South Africa. If you call SARS by phone, if you send them an email, if you go to one of their offices - someone will respond deal with your query. Best of all, they have put the whole less-than-pleasant business of filling in the tax returns at the fingertips of internet-enabled South African taxpayers.

Online tax returns were introduced in South Africa in 2006. Back in 2007, only 108,792 tax returns cam via the cyber space. In 2008, that number already rose to 758,572. And during the first fifteen weeks of current filing season, which began on 1 July 2009, SARS received 1,169,280 income tax returns through electronic filing. It is expected that many of the 5,5 million individual South African taxpayers will flock to their computers and navigate to the SARS eFiling page on the very last day of the deadline (20 November). As the saying goes: If you can’t avoid it, at least delay it…

Since in South Africa – as everywhere else – it is the “ordinary” employees who form the backbone of taxation system, SARS has done its best to serve them well. Starting with 2008, SARS made the employers work a little harder when it comes to submitting the employee income tax deduction data. That data was then linked to the individual registered tax payer – and bingo!

Today, when a South African taxpayer logins in (albeit reluctantly) to do the tax return, most of the relevant data will be already entered. It only remains to declare additional income over and above the salary (world wide, mind you) and to conscientiously enter all the non-taxable expenses. Alas, in the case of “ordinary” employees, those are few and usually begin and end with medical expenses.

Once the digitally-empowered tax payer completes the online tax return, he (or she) can quickly make use of the tax calculator to foretell his (or her) tax future: Will there be a refund? Or – perish the thought! – is an additional payment looming?

Of course, as the Receiver of Revenue points out soothingly, the main purpose of the tax calculator is to check for accuracy. If the calculator shows that you are due to pay a large amount of additional tax, it usually does not mean that SARS is about to reduce you to the status of a beggar.  Nor does it meant that SARS is about to bestow a windfall on you if the calculator shows that you are in for a large refund. In either case, you probably made a mistake and need to go through the figures again.

For the time being, a South African taxpayer does not get anything personally in return for the tax he (or she) pays, which can be from 18 to 40 percent of the income (the bigger the income, the bigger the percentage). However, at the end of tax season the friendly Receiver of Revenue remembers to thank all the tax payers for contributing money for building schools, hospitals and clinics for the poorest segment of the population and for other government expenses. During the 2008-2009 tax season, the main contributors to total revenue were personal income tax (R197.07 billion), company income tax (R165.23 billion) and Value Added Tax (R153.81 billion).