PRESSURE has been mounting from the South African Revenue Service (SARS) to enable it to meet its annual target, with taxpayers saying they have been receiving letters asking them to pay their tax debts.
March 1 is the beginning of a new tax year.
SARS needs to collect about R820bn in the 2012 tax year and the South African Institute of Professional Accountants (Saipa) confirmed at the weekend that it had noticed the increased pressure and requested taxpayers not to ignore requests from SARS.
SARS has wide-ranging powers to compel third parties, such as employers and banks, to pay outstanding tax monies directly to it.
"Be warned that they will not display unlimited patience at this time of the year," said Ettiene Retief, chairman of Saipa’s national tax and stakeholder committee.
He also reminded taxpayers to have any outstanding payroll problems resolved and year-end reconciliations done before the budget speech on Wednesday.
Mr Retief said to have multiple issues unresolved at this time of the year "is a recipe for sleepless nights and, ultimately, penalties".
April and May should be devoted to disclosing to SARS what was done in the previous tax year and issuing employees’ tax certificates, and not to fixing outstanding tax issues, Mr Retief said last week.
He reminded individuals who received car allowances or use a company car to take an odometer reading on budget day, as it is the last day of the 2012 tax year.
Finance Minister Pravin Gordhan will deliver his 2013 budget to Parliament on Wednesday with several requests for tax relief still streaming in. The latest request is from the South African Institute of Chartered Accountants (Saica), which seeks relief on the VAT levied on membership fees to professional bodies, paid by employers on behalf of their employees belonging to bodies such as Saipa and Saica.
Piet Nel, Saica’s project director for tax, asks for a "general public ruling" that should be issued to confirm the recoverability of VAT on professional membership fees as an interim measure.
As a long-term solution, he recommends an amendment to the VAT Act to regulate and clarify the position. He said the tax levied on the membership fees of employees was not allowed as a deduction for VAT purposes if paid by the employer.
He said the reason employers paid for an employee’s membership fees was to effectively outsource the regulatory requirements to the regulatory bodies.
Companies that employ professionals, such as doctors, lawyers and accountants, require that their employees remain members of their respective professional member bodies to ensure "effective monitoring of ongoing professional conduct and development".
When they enlist with a professional body the regulatory responsibility falls on the organisation.
The definition of input tax as stated in the VAT Act requires that for the tax to be input tax, the services must be acquired by the vendor, which in this case they are not.
The practical difficulty is that only the employees, and not the employers, qualify to be members of professional bodies, Mr Nel explained.