Income tax filing season is now open and many taxpayers are eagerly awaiting a refund as soon as they file their return. Previously, SARS has been quick to refund taxpayers who are due for a refund, within a day or two. However, since 2014, tax advisors and auditors have seen several changes in the process that result in delays in refunds. The question is, why is the SARS process being extended now, and what are the top three reasons taxpayers are waiting longer for refunds?

1) Invalid bank details in RAV01

Invalid bank details according to SARS records may delay your refund. To prevent fraud, SARS is checking the bank details of many taxpayers. Before filing your tax return, please ensure that the bank details reflected on your RAV01 form (available in SARS e-filing) are reflected as valid. If you have changed your bank details since filing your previous tax return, first update your details on form RAV01 and then file your return. In some cases of SARS, you may need to personally visit the nearest SARS branch to verify the change in your bank details. You will be notified in writing. Please note that specific supporting documents will be required (be sure to check before entering SARS).

2) SARS Special Caps:

The special cap placed on returns can only be lifted at a SARS branch. You will need to provide SARS with proof of your residential address, a certified copy of your ID, and a bank statement no older than 3 months stamped by the bank.

3) Verification of your tax return:

South Africa has seen a significant increase in the number of taxpayers selected for review or verification. If SARS requests supporting documentation, be sure to upload all relevant documentation that was used to compile the income and expenses reported on your return. It is advisable to prepare a schedule that summarizes (for example) all the medical expenses incurred. If you are a travel allowance holder, please remember to attach the itemized logbook and proof of purchase of the motor vehicle.

The South African Revenue Service (“SARS”) has published the deadlines for filing income tax returns. The deadlines depend on the form of presentation of the tax return. These deadlines do not apply to companies that must file their returns within 12 months after the end of their fiscal year through e-Filing.

The 2017 filing season will officially begin on July 1, 2017, and individual taxpayers will be able to file their returns for the tax year ending February 28, 2017. eFilers will be first in line and will be able to file from from July 1, while the SARS branches and contact center will be open for attendance only from July 3, 2017.

The Income Tax Law has been modified to impose administrative sanctions for non-compliance. These fines can range from R250 to R16,000 per month. Make sure you have all the supporting documentation for your return, as SARS might request it if you are selected for review. Safeguard supporting documentation for at least five years in case SARS needs to access it in the future.