Minutes of the Sars National Stakeholders Meeting Held at Brooklyn on 1 November 2011

Minutes of the Sars National Stakeholders Meeting Held at Brooklyn on 1 November 2011

MINUTES OF THE SARS NATIONAL STAKEHOLDERS MEETING HELD AT BROOKLYN ON 1 NOVEMBER 2011

ITEMS DISCUSSED

1TAX PRACTITIONER AUTHENTICATION

1.1General

  • Most Tax Practitioners (“TP’s”) are making use of the TP Call Centre in order to resolve their queries. Unfortunately close to 80% of TP’s experience authentication failure. This is due to the TP number, which contains both numeric and alphanumeric characters, which makes it difficult to enter correctly.
  • Additionally, approximately 24% of all TP’s no longer meet the requirement to be registered or have never met the registration criteria.
  • SARS is proposing to revise the TP numbers and to replace the alpha characters with their numeric equivalent. Practitioners would be made aware of their new TP numbers either via e-mail or post and the project is expected to be completed within the next 6 months.
  • Running concurrently with the conversion of the TP numbers; TP’s that have been identified as no longer meeting the requirements to be registered, as per Section 67A of the Income Tax Act, would have their TP numbers deactivated or suspended.

2TAX CLEARANCE CERTIFICATES (“TCC”)

2.1 General

  • It was noted that TCC’s are not issued as a result of information that is outstanding for more than 5 years or refused due to very small amounts outstanding.SARS have acknowledged the problem and have indicated that they will consider proposals in this regard.
  • All declined TCC’s should be supported by reasons for the decline.

3VAT

3.1VAT Reviews and Audits

  • SARS have indicated that based on statistics, there has been no unusual or significant increase in the number of VAT reviews.
  • VAT review selection are based on a risk and criteria matrix.
  • The SARS VAT review process has three stages:
  1. Initial request for more information via a letter
  1. Assessment of initial supporting documentation and possible further detail audit.
  1. Refer for further investigation if fraudulent or criminal activity is identified.
  • SARS have indicated that 40-50% of VAT returns are on average not filed on time (statistics from the last three months) and have urged VAT vendors to submit VAT returns timeously.
  • SARS have also indicate that a large number of VAT Input claims cannot be supported by invoices for the input VAT. SARS have indicated that where no supporting documents are submitted after final demands have been issued, normally after a period of 3 months, VAT Input claims will be reversed.
  • There are still some confusion surrounding the voluntary versus mandatory registrations for VAT. SARS have indicated that they are busy with a Draft interpretation note in this regard;

3.2Statements of account

  • A new statement of account for VAT has been be introduced.

3.3Refunds

SARS acknowledged that there has been delays during the earlier months of the year in the payment of VAT refunds due to the roll over to the new VAT risk management system, but that significant improvement have been noted during the past couple of months.

SARS emphasised that it is important for tax practitioners to submit requests for supporting documentation timeously and to allow for a 21 working day period before refunds are paid. In a lot of instances, tax practitioners do not allow for the 21 working day period before refunds are paid, and this causes unnecessary enquiries to the call centre and branch offices.

4INCOME TAX

4.1 Companies

4.1.1New IT14SD return

A new return called the IT14SD for Companies will be rolled out by SARS during the next couple of weeks. The return will not be compulsory for all Companies, but will be introduced to review cases. The aim of the return is to provide SARS with a summary of reconciliation info relating to Employees Tax, VAT and Income Tax on one summarised return. A guide on the IT14SD return will be made available on the SARS website.

4.1.2New ITA34

A new statement of account and ITA34 have been rolled out.

4.1.3PAYE reconciliations

SARS have indicated that a significant number of PAYE reconciliations are still behind with filing and that taxpayers should submit urgently to avoid penalties.

5OBJECTIONS AND ADVANCE DISPUTE RESOLUTIONS (“ADR”)

5.1General

SARS still follow the Pay Now, Argue Later principle;

SARS emphasised that the ADR1 and ADR2 forms are to be used for Companies and the NOO and NOA forms for Individuals and have pointed out that tax practitioners complete the incorrect forms.

The ADR forms for Companies are now available and can be submitted electronically. SARS is in the process of making this available for Trusts in the future as well.

6ADMIN PENALTIES

6.1General

It was noted that separate statements of account are issued relating to admin penalties. Problems were however noted and examples of incorrect admin penalty statements were provided to SARS.

SARS is aware of the fact that admin penalties were levied on certain taxpayers below the threshold and who were not required to submit income tax returns. SARS is busy rectifying this problem and all cases should be forwarded to them.

It was noted that the ITA88 are issued relating to admin penalties and is system driven. The IT88 is used as a measure of other debt collection through agents etc and are used by SARS as a last measure only.

7BRANCH OFFICES

7.1General

SARS have indicated that they are introducing a new queue management system, i.e. separate queues, for example queues for change in bank details, VAT etc, at the branch offices to alleviate long waiting periods.

7.2 Polokwane

It was noted that there are a lack of resolution of issues at the Polokwane branch. SARS have indicated that they will look into the matter and ensure they have representation from their Executive staff at the next meeting.

7.3Belville

SARS have indicated that the Belville office is still a focus area to improve service delivery.

7.4New SARS Offices

New SARS offices have been opened in Pretoria North and Soweto.

Expansions at a number of existing branches for example Belville and Durban.

SARS is exploring and performing feasibility studies on the opening of branch officesin Parow, Long street Cape Town, Durban and Practitioner units at Megawatt Park and Cape Town Northern suburbs.

SARS is also continuously exploring other localities for opening of new offices. A location map of all branches will be provided at the next meeting.

7.5SARS Mobile Offices

SARS commented that the mobile offices have been a huge success. Details of the locations visited and dates are updated on the SARS website.

8E-Filing

8.1General

Taxpayers are requested to refresh IT returns before completing them.

SARS is continuously improving e-file versions and performing updates to the e-filing system.

A new request to submit corrections for Company returns is now available on the e-file system.

A new XBRL return for Companies that interfaces with accounting software is planned for the future.

9PROVISIONAL TAX

9.1Lump sums

Reference was made to the previous meeting where the impact of lump sums on provisional tax calculations were discussed. It was noted that the law needs to be amended to exclude lump sums from the provisional tax calculations as the tax on lump sums are separately calculated as part of the tax directive.

9.2Savings account

ACCA suggested creating a savings facility for provisional tax payments and to make a submission to SARS in this regard. The taxpayer should have an option to save his provisional tax with SARS and allocate to his provisional tax account when due.

10OTHER GENERAL MATTERS

10.1Dividend withholding tax

SARS have indicated that the new dividend withholding tax is expected to be introduced and effective from 1 April 2012. Companies need to take note of the significant data requirements.

10.2Medical aid

SARS have indicated that they are experiencing duplicate medical aid claims for claims already claimed as part of the medical aid certificate. They are looking at improvements on the medical aid details disclosed on the certificates received from medical aids, for example details of dependents and disabled persons etc.

10.3Withholding tax on interest for foreigners

SARS have indicated that the expected date for the withholding tax on interest for foreigners will be 1 January 2013. A new IT3b will be issued in this regard.

10.4Name changes in terms of the New Companies Act for state owned Companies etc. and the impact on tax invoices and SARS registered particulars.

SARS have indicated that they are looking at this as a matter of urgency as the Law currently requires update of details with SARS within 14 days of changes.

10.5Voluntary Disclosure Programme (“VDP”) Applications

SARS have indicated that there is currently a backlog with the VDP applications due to a significant number of applications and a lot of which do not qualify.

10.6Tax Practitioner login details

SARS have requested TP’s not to disclose their login details to clients or any other party due to the confidentiality of information.

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