Pretoria - As the South African Revenue Service (Sars) announced an increased tax return threshold on Tuesday, associate professor of accounting sciences at North West, Herman Viviers, has warned taxpayers to be cautious and not ignore filing their normal tax returns.
Sars on Tuesday announced that all taxpayers whose total employment earnings are less than R500 000 will now not be required to submit personal income tax returns (ITR12).
“It is a large increase. 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," Viviers said.
"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. The less returns submitted the less admin for them."
Sars also said taxpayers who would not be required to file their income tax this year include those who only receive income from a single employer, those who have no other form of income such as car allowance, business income, taxable interest, and rental income, and those that do not have any additional deductible income such as medical expenses, retirement annuity contributions and travel expenses.
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 expenditure tax credit to be claimed upon assessment.
Viviers said although individuals might earn less than R500 000 a year, they should take into account their retirement annuity fund contributions and allowances as these usually result in additional deductions to be claimed upon assessment which could result in a possible tax refund.
"It also holds the same administrative benefits for the taxpayer. But, like I said, individuals should be cautious," Viviers said.
"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."
Viviers said that 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.
African News Agency (ANA)