Port Shepstone Stakeholder Meeting

16 March 2012

SARS Port Shepstone

1. OPENING AND WELCOME
The attendees were welcomed and thanked for making time to come to the meeting. The Branch Manager, Wandisa Madyibi (WM), stated that Stakeholders Meetings are of great importance to SARS and SARS does use the feedback received and lessons learned to try and improve our service offering to all stakeholders.
2. APOLOGIES
Various apologies were noted and minutes will be sent to all attendees and non- attendees
ATTENDEES:
TAX PRACTITIONERS
Diana Maple Paddy Maple
Farouk EngarMike Winson
Kylie CoombeShaun Bartlett
Rene BoshoffPeter Kolbe
Martin BrandMauddie Pepper
Willie RushMike Gird
Jean GerberArshud Shaik
Gary HolburnSG Brookes
Gary MoodleySean Edgecumbe
Dave ParryCris Nash
Murray RossShannon Walton
Renette BodensteinTrevor Labuschagne
Heidi van AswegenJay Rambharos
Ian LaightMalcolm Sievwright
Amaran Naicker
SARS
Wandisa Madyibi Branch Manager Port Shepstone
Ian Butler (IB)Team Leader Port Shepstone
Vincent LushabaTeam Member Port Shepstone
Nomhle BhenguInterfile Consultant
3. MINUTES OF PREVIOUS MEETINGS
The previous minutes were inadvertently not sent out to all practitioners. IB apologised for the oversight.
4. NEW MATTERS ARRIVING FROM PREVIOUS MEETINGS
No new matters.
5. NEW MATTERS
5.1 VAT SUPPORTING DOCUMENTS (VAT SD)
SARS is offering vendors the option to submit supporting data instead of supporting documents.
Supporting documents are physical or scanned images of documents supporting the completion of the VAT201.
Supporting data is the data appearing on documents used in support of the completion of the VAT201, for example the data captured on invoices, debit and credit notes.
What should be done if the VAT201 has been selected for review by SARS?
The vendor will now have one of the following three options:
1. To review and revise the VAT201 if any errors were found (current option)
2. To submit supporting data electronically (new option)
3. To submit supporting documents (current option)
If Option 2 is chosen , the vendor can make use of 1 of 2 channels:Direct Data Flow Channel or the
e@syFile VAT Channel
The implementation date for VAT SD has been set at18 May 2012.
Where to access more information – on the SARS Website:
Click on Tax Types - VAT dropdown box
Under VAT supporting data submission – click on the hyperlink
Under Data type click on the VAT supporting Data link
5.2 BUDGET 2012
What are the Tax Rebates for 2013? / Primary:R11 440
Secondary (Persons 65 and over):R6390
Tertiary (Person 75 and older): R2130
What are the Tax Thresholds for 2013? / Below age 65:R63556
Age 65 to below 75:R99056
Age 75 and older:R110889
What are the Interest exemptions for 2013? / Below age 65:R22800
Age 65 and over:R33000
Medical Tax Credits / Effective from 01.03.2012 replacing the Income Tax deductions for Medical Aid contributions for taxpayers below 65 years of age.
Dividend Tax / Effective from 01.04.2012 at a rate of 15%
Capital Gains / Primary residence exclusion R2 000000
Annual exclusion of R30 000 of capital gains/loss
Estate cases exclusion of R300 000 on death
Maximum effective rate of tax:
Individuals and special trust:13.3% (33.3%)
Companies:18.6% (66.6%)
Other Trusts:26.7% (66.6%)
5.3 MEDICAL TAX CREDITS
Effective date: 01 March 2012
For taxpayers aged below 65.
The medical tax credit is a fixed amount that will be offset against tax payable. It will replace the tax deduction that was granted for medical scheme contributions, and is applicable to a person or a dependant with or without a disability.
This will affect the calculation of Employees’ Tax to be withheld by employers from employees remuneration
A medical scheme contribution tax credit will be available to taxpayers who belong to a medical scheme and are below the age of 65 (including persons with a disability), set at fixed amounts per month:
R230 per month for contributions made by the taxpayer and R230 for the first dependant; plus
R154 per month in respect of each additional dependant.
The medical tax credit is not refundable, and cannot exceed the amount of tax to be deducted (i.e it will not create a refund).
The non–taxable fringe benefit in respect of medical scheme contributions paid by the employer on behalf of a taxpayer who is 65 years and older and who has not retired from that employer has been repealed – it will now be a taxable fringe benefit.
However, a person 65 years and older is still entitled to the full medical scheme contribution paid as a deduction. The net effect on such a person’s tax due is therefore nil.
Where a person with a disability is not involved, medical scheme contributions in excess of four times the total credits and out-of-pocket medical expenses combined in excess of 7.5% of taxable income, can be claimed as a deduction from taxable income.
For a person with a disability or with a dependant with a disability, medical scheme contributions in excess of four times the total credits and out-of-pocket medical expenses can be claimed as a deduction from taxable income.
Issues raised:
What would happen if the employer did not allow a credit during the year? Would the taxpayer get the credit on assessment?
What is the rationale behind the treatment of the disabled?
5.4 DIVIDEND TAX
Dividends Tax, applicable to all South African resident companies, as well as non-resident companies listed on the JSE, will come into operation on 1 April 2012. Dividends Tax will be borne by the shareholder at a rate of 15%
What return will be completed – DTR02
Will STC and Dividends Tax overlap? There is no overlapping period. If a dividend is declared prior to 1 April 2012 (irrespective of actual payment date) it will be subject to STC. Only where the dividend is declared and paid on or after 1 April 2012 will it be subject to Dividends Tax.
Certain dividend payments could be exempt from DT depending on the nature or status of the recipient.
Which channels are available for submission of Dividends Tax returns and supporting data?
  • eFiling/
  • e@syfile/
  • Branch Office
  • Direct Data Flow Channel (expected May 2012)

5.5eFILING
Updated version5.0.9 of e@syFile™ Employer is now available.
[Will it be possible to import information from the older versions onto the new one? It will be as long as you follow the correct process]
Correction on Trust returns:
Still no update – please follow the old process (letter of correction/ADR)
Time out error:
Still a problem.
[Using Mozilla Firefox instead of Internet Explorer is an option that taxpayers should consider – it is sometimes more stable that IE8]
Movement of Clients out of Practitioners’ profile:
Individuals – no waiting period
Companies – 5 day waiting period.
[Any problems with the transfer of rights / profiles need to be reported immediately so that they can be investigated. Nomhle Bhengu’s email address is…]
Capturing Payments as Manual :
Choose GENERAL UNPAID, then “tick” next to Payments, scroll to the bottom of the page and then only will the “Manual Payments – Capture details of payments made outside of this system ” button activate.
6. GENERAL
CIPRO to CIPC changes of all legal documents.
IT14SD – Is there an extension that can be requested?
Auditors reply: There is no extension but when you scan your supporting documents in – you need to attach a letter requesting for additional time, the auditor will consider your request based on merit.
While SARS should have all the information required to complete an IT14SD on its Systems, SARS places the responsibility on the taxpayer to complete the declaration.
Can queries relating to IT14SD’s be put in writing and posted to client / practitioner rather than phoning them? The phone calls don’t always come at opportune times.
Objections: Grounds of Objection must be specified.
NOO – must be completed correctly and the correct supporting documents submitted (for PIT and CIT).
ADR1 - must be completed correctly and the correct supporting documents submitted (for VAT and PAYE).
Audits on TP’s with No Additional Taxes:
Risk Engine generated. Supporting documents required.
Stakeholders asked why there are still so many audits? Many clients / vendor seemed to be targeted despite NIL audits being done previously. The rationale behind the selection was questioned as many of the cases are exceptionally low risk in nature.
Issues Raised:
IT Reference Numbers for Trusts:
21 day turnaround time for the processing of IT77TR’s as these are done in Durban (not done in PS).
Estates:
Is there a contact person in Estates that Practitioners can contact with queries? The stakeholders were advised that the Estates Section no longer exists. Estates queries must be escalated to whichever section deals with that particular query, e.g. for Estate account’s queries, contact Accounts Maintenance; for Estate assessment queries, contact Assessment Maintenance.
ITR12’s:
Could the office ensure that changes of details are correctly captured when ITR12’s are being captured in the office? IB advised that, as part of the authentication process, staff should be checking client’s registered particulars. Clients are also given an opportunity to check the ITR12 for completeness before they leave the office.
Staff should also enquire from clients if the practitioner number on the return is still valid and delete it if necessary. This would ensure that practitioners do not get correspondence relating to client that no longer use their services.
Resubmission of Supporting Documents:
A request was made that Auditors check other cases relating to a client before asking for the same supporting documents that were previously submitted. This would reduce a lot of duplication of work.
Auditors are also disallowing deductions (especially medical aid) despite the fact that the supporting documents support the deduction. Why?
PAYE Admin Penalty:
A number of Guidelines are available on
Casual Labour :
The Guide for Employers states that the following records and information must be provided by an employee in terms of section 4(c) of the Act -
Surname and full names;
Address;
Identity number or passport number and date of birth;
Income Tax reference number (if any); and
The issue of casual labour and the burden that record keeping is placing on the employer was raised. Why do employers have to get information for casual labourers?
Employers Filing Season:
1 April – 31 May
No Manual forms or e@syFile disks kept at office.
Vat Registrations:
A Letter of Authority (not a POA) is required stating that the representative has the authority to conduct the vat registration interview. A number of changes have occurred internally relating to the VAT registration process. All offices are trying to ensure that they are dealing with registrations in the same manner.
Issues raised:
  • IT14’s – when will practitioners be able to start submitting these? Waiting until July (for the opening of Filing Season) is a waste of time, especially since not all companies have February year-ends.
  • SARS Correspondence – doesn’t always open immediately and can cause everything to hang. Nomhle will report this.
  • Filing a return – when ready to submit the return, a message is displayed advising that the return cannot be filed as you have taken too long. The result is that you need to save and reopen a return constantly to avoid this happening which is a waste of time. This appears to be a common problem. This problem is being attended to.
  • EMP501’s for non-employers – manual submissions will have to be made for these under the IT number of the “employer”
  • The Recon Assist tool only works for simple reallocations – this is what it was designed for. “Complex” reallocations will require Accounts Maintenance intervention.
  • Application Forms – a suggestion was made that all the most up-to-date registration forms be available on a ZIP file on the SARS website that practitioners could then download and be sure that they are using the most recent version of the application form.
  • Logbooks – a stock of logbooks has been ordered and will be available to practitioners and the public.
  • Minister’s remarks regarding Tax Practitioners - the assembled stakeholders felt that the Minister of Finances comments regarding tax practitioners were unfair as they tarred all practitioners with the same brush.

7. DATE OF NEXT MEETING
15 June 2012
8. CLOSURE
The Branch Manager encouraged feedback about all SARS and branch related activities / processes as this feedback would be used to improve our service to our clients. Our Tax Practitioners are an important part of the process.
The Branch Manager wished everyone well and safe journeys home.