You might not have to file your income tax return this upcoming tax season

Tax and Accounting

SARS' new tax return threshold

On Tuesday the 4th of June 2019, the South African Revenue Service (SARS) announced that it had increased the tax return threshold from R350,000 to R500,000.

SARS’ new tax return threshold means you might not have to file your income tax return this upcoming tax season. But is it wise not to?

On Tuesday the 4th of June 2019, the South African Revenue Service (SARS) announced that it had increased the tax return threshold from R350,000 to R500,000.

This means that individuals earning less than R500,000 will not need to submit personal income tax returns (ITR12).

However, SARS said that taxpayers still need to meet the following criteria:

  • The taxpayer’s total employment income for the year before tax is not more than R500,000;

  • The taxpayer only receives employment income from one employer for the full tax year;

  • The taxpayer has no other form of income, such as car allowance, business income, rental income, taxable interest or income from another job; and

  • The taxpayer does not have any additional allowable tax-related deductions to claim, such as medical expenses, retirement annuity contributions and travel expenses.

But may it be in your best interest to file your ITR12 return?

“People should be very wary not simply ignore filing their normal tax returns as there is always the possibility of getting a tax refund due to additional tax deductions and/or tax credits only allowed upon assessment,” said Prof Herman Viviers of North-West University.

Viviers also cautioned that although individuals might earn less than R500,000 a year, they should take into account their retirement annuity fund contributions and allowances (received from an employer) as these usually result in additional deductions to be claimed upon assessment which could result in a possible tax refund.

Individuals above the age of 65 with large medical expenses not recoverable from their medical schemes also need to declare these on their income tax return in order to qualify for the additional medical expenses tax credit to be claimed upon assessment.

Individuals will lose out on these deductions and tax credits if they do not submit their tax returns.

“The main reason for SARS lifting the threshold is that it lessens their administrative burden of processing tax returns from the lower income-earning group,” said Viviers.

“The fewer returns submitted the less admin for them. It also holds the same administrative benefits for the taxpayer.

"But, as I said, individuals should be cautious. They should evaluate their tax position and although not submitting their returns might seem like an enticing prospect, they should evaluate if they are in line for deductions and tax credits," said Viviers.

If uncertain, individuals should consult with a registered tax practitioner, as the non-submission of tax returns could result in non-compliance penalties to be levied in terms of the Tax Administration Act.

SARS commissioner Edward Kieswetter announced on 4 June that the tax season will officially start on 1 August for all taxpayers, while digital platforms will be available for e-filing from 1 July.

If you are uncertain about whether you are required to file a tax return, please contact us at tax@securitas.co.za


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