Taxpayers and their advisors are struggling with some of the changes to the new tax returns and described it as less user-friendly as anticipated.
It seems as is if the design of the form is confusing and some technical glitches have been experienced since the start of the 2017 filing season.
According to the South African Institute of Tax Professionals (Sait) the medical and retirement annuity sections on the income tax return form have changed “significantly”.
Sait tax technical operations manager Chérie Carstens-Petersen says the guide to complete the new return was only published after the filing season started.
She says with change comes uncertainty and resistance. “Taxpayers were not used to having to complete their policy details for each retirement annuity.”
The new section requires that each policy should be completed separately (name of fund, policy number, contributions made to that particular fund).
“The red herring is that the additional details section, where you complete each policy, comes after the block for the tax code, so people were missing it. Only when they tried saving or submitting did they receive an error message.”
The South African Revenue Service (Sars) has acknowledged that there were some glitches with both the new requirements relating to medical aid contributions and retirement annuity fund contributions.
Sars says it may confuse taxpayers that they first need to complete the “total contributions for this year of assessment” field before they complete the details for each of their policies.
Sars explains the taxpayer must complete all the “Details of Policy(ies)” information for each of their retirement annuities, and then add all the “Contributions made to this policy” amounts together. The total amount must be filled in next to “Total contributions for this year of assessment” (tax code 4006) at the top of the section which reads “Retirement Annuity Fund Contributions”.
The glitches relating to the capturing of medical deductions information has, according to Sars, been corrected.
“In some instances, the medical scheme’s name has been pre-populated with the medical scheme administrators name instead.”
This means where an administrator submits the medical data on behalf of the medical scheme, the administrator’s name appears (as opposed to the name of the actual fund).”
Sars says it has been corrected. The reason behind this is “purely for information purposes” on Sars’s side in order to identify the scheme.
It has no bearing on the taxpayer’s tax assessment.
Sars also says there have been instances where the number of dependents per month reflected incorrectly on the income tax return. This has also since been corrected.
Cartens-Petersen says taxpayers who have already submitted their returns with the errors will need to object to any incorrect assessments.
“This clogs up the system and further delays any refunds due to the taxpayer. Sadly, another consequence of these issues is that the taxpayer and practitioners lose trust in the system.”
She suggests that Sars open filing season a day or two earlier to their own staff or the recognised controlling bodies (such as Sait) to test the form properly when there are significant changes.
“That way, any major hiccups will be spotted before it affects the greater population.”
Sars says the glitches have only affected a limited number of taxpayers who filed in the first week of tax season.
Taxpayers who are faced with incorrect assessments due to these glitches can either do a revised declaration, submit a dispute, or if they have only saved but not submitted, they can refresh the medical scheme specific section on the form.