For years post-Apartheid the worst number one public enemy has been the tax man more than fuel hikes, electricity bills and not knowing the in’s and out of tax season procedure. Many finding themselves owing the tax man thousands to millions without their knowledge.
This Year SARS is using an auto-assessment for taxpayers whose tax affairs are less complicated, which provided them with an opportunity to increase the number of taxpayers participating tax season filing. The auto assessment works in a way that South African Revenue Services (SARS) receives data from employers, medical schemes, banks, retirement-annuity funds and other third parties to calculate your tax assessment.
After the auto assessment process has completed, SARS will send an SMS notifying the taxpayer of the outcome of the assessment, in which you can log into eFiling or SARS Mobiapp to check if a refund is due to you or if you owe SARS.
The income tax return filing dates are as follows:
- Auto-assessment notices: 1 July 2024 to 14 July 2024
- Individual taxpayers (no provisional): 15 July 2024 to 21 October 2024
- Provisional taxpayers: 15 July 2024 to 20 January 2025
- Trusts: 16 September 2024 to 20 January 2025
Furthermore, SARS this year in it’s journey towards building vision of smart, modern organisation with unquestionable integrity has made the following changes to ensure taxpayers comply with their legal obligations:
Solar rebate
To encourage individuals to invest in clean electricity-generation capacity, the solar energy tax credit was available for one year. It applied to new and unused solar PV panels that were acquired by the individual and brought into use for the first time from 1 March 2023 to 29 February 2024. The amount of the solar energy tax credit allowed as a deduction to an individual under section 6C was 25% of the cost of the solar PV panels described above, up to a maximum of R15 000. It should be noted that a deceased estate does not qualify for the solar energy tax credit.
Pro-rata deduction in respect of contributions to Retirement Funds
Section 11F(2)(a) of the Income Tax Act No 58 of 1962 was amended as follows: Where any person’s year of assessment is less than 12 months, the amount stipulated in section 11F(2)(a) of the Act used to calculate the allowable retirement contribution deduction (currently R350 000) shall be adjusted. The adjusted amount will bear the same ratio to R350 000 as the number of days in that year of assessment bears to 365 days. Therefore, if any person’s year of assessment is less than 12 months, the allowable retirement contribution deduction (currently R350 000) will be applied pro rata.
Exemption of amounts received or accrued in respect of tax-free investments
Section 12T(4)(a) of the Income Tax Act was amended as follows: Where any person’s year of assessment is less than 12 months, the contribution limitation stipulated in section 12T(4)(a) of the Act (currently R36 000), shall be adjusted. The adjusted contribution limitation will apply in aggregate for any year or years of assessment during the 12-month period commencing in March and ending at the end of February of the immediately following calendar year. Therefore, if any person’s year of assessment is less than 12 months, the applicable contribution limitation (currently R36 000) will be applied pro rata.
Deductions in respect of erection or improvement of buildings in Urban Development Zones
Section 13quat of the Income Tax Act, was amended by substituting the following paragraph in subsection (5) for paragraph ©: ‘‘© which is brought into use by the taxpayer after 31 March 2025.’’ Therefore, the Income Tax Return (ITR12) form will be amended to extend the allowable deduction until 31 March 2025.
Redesigned deduction in respect of certain machinery, plant, implements, utensils and articles used in production of renewable energy
The redesigned Renewable energy tax incentive under section 12BA will apply to the currently eligible renewable energy sources, with no electricity-generation limits for the duration of this temporary incentive. Certain new and unused assets owned by a taxpayer will qualify if they are used in the generation of electricity. Such assets must have been brought into use by the taxpayer for the first time for purposes of trade on or after 1 March 2023 and before 1 March 2026. Businesses can deduct 125% of the cost incurred with reference to eligible assets, upfront.
Where a taxpayer disposes of an asset on or before 1 March 2026, for which a redesigned renewable energy tax incentive is granted, the amounts deducted (a maximum of 125% of the cost of the asset) will be fully recouped.
Information sourced from South African Revenue Services official website
