The 400 000 South Africans who thought they could remain under Sars's radar have a big surprise coming their way. The South African Revenue Service (Sars) has uncovered them after employers submitted their PAYE data to Sars. Authorities will be in touch. According to Sars's spokesperson Adrian Lackay, these taxpayers will be "contacted and registered for tax purposes. Their returns will be pre-populated and assessments issued in due course".

The news is also not good for the 46 753 employers which failed to submit their staffs' PAYE data. Sars will be contacting these offenders "to establish the reasons for non-compliance", says Lackay. These employers could receive a penalty equal to 10% of PAYE held by them and their employees will not receive or be allowed to submit their tax returns.

Lackay urges affected employees running out of time to "confront their respective employers to reconcile and issue IRP5s" and join the 1,5m taxpayers who submitted their returns by December 8 (See table 1). The 67% of South Africans who have not yet submitted their returns are also urged to do so.  

In South Africa it is illegal not to pay tax should your gross income plus taxable capital gains for the tax year exceed the tax thresholds. You must apply to register as a taxpayer with your local revenue office within 60 days of your income exceeding the tax threshold. A registered taxpayer is required to complete and submit a tax return annually to Sars, within the time stipulated, unless Sars states otherwise. 

The onus is on the taxpayer to let Sars know that they have changed their address within 60 days of doing so, as it is to make sure you receive your tax return. Any person who fails to register or inform Sars that they have changed their address within the prescribed time could face a stiff penalty, or be imprisoned for up to 24 months. Sars can also estimate the taxable income of a taxpayer and charge them three times the amount of tax due should they fail to submit their tax return or provide revenue with incomplete information. However, the penalty could be a lot worse should proposed new legislation be passed.

According to the proposed scale of penalties, an individual taxpayer earning less than R300 000 a year will be penalized R500 if their return is submitted less than three months late. A further penalty of R1 000 will be imposed for each additional three-month period that the return is late, topping out at R11 500. If the taxpayer is a major corporation, the penalty tops out at R184 000.

National Treasury has recommended that the deemed mileage and cost method of determining the deduction against a travel allowance granted to employees is to be scrapped with effect during the 2010 /11 tax year.

In its hey-day, remuneration structuring was widely used by employers to provide employees with a higher than normal after tax income. This was mainly as a result of Sars accepting the so called "salary sacrifice" principle for remuneration structuring and that it was in order for employees to structure their affairs so as to pay the minimum amount of taxation as possible. 

Slowly but surely Sars have been removing the ability for employees, and likewise, employers to structure their remuneration packages in a manner that would reduce their tax burden when compared to the receipt of an unstructured salary. In fact, SARS have on numerous occasions telegraphed the fact that they are going to limit the ability of employers to structure the remuneration of their employees.

The last significant remaining remuneration structuring method available to employees has been the utilisation of the so-called travel allowance, which benefit is now to be severely curtailed. Treasury's rationale for removing the deemed mileage and cost method is somewhat dubious and does not seem to be based on any objective research.  Reading between the lines, it seems that their main objection is that there is no full-proof mechanism for Sars to validate the actual mileage travelled by employees claiming against their travel allowances.

Currently, 40% of the allowance is not subject to monthly PAYE. With the curtailment of the travel allowance one would assume that the PAYE concession would also be removed or reduced, thus impacting salary earners monthly after tax cash flows.

The announcement is not doom and gloom for all employees receiving travel allowances as those employees who are incurring genuine business travel will be able to claim a deduction, provided that they maintain a detailed logbook and keep accurate records of the costs incurred in the running and maintaining of their motor vehicle. Sars hold the view that the travel between an employee's private residence and their place of work does not constitute business travel which will impact the mileage qualifying for business purposes.

The abolishment of the deemed mileage and cost method of claiming against a travel allowance could have a negative impact on those employees receiving travel allowances, either in the form of additional record keeping or reduction in take home pay.

Being a member of our Network, you will be provided with information as well as documentation such as logbooks etc.

http://sites.google.com/site/choicenetwork. Becoe a member, you will not be dissappointed...

Key Market Indicators

Week ending

12 June 2009*

Movement for the week

Expectations for this coming week

ALSI                             22915                           -251(-1.08%)                              Volatile

Industrial index              20928                           -27 (-0.13%)                             Increase

Gold index                     2403                            -148 (-5.80%)                             Decrease

Financial index              15804 95                       (+0.60%)                                   Increase

Rand/$                         R7.98                            R-0.35 (-0.44%)                         R7.80/$ - 8.10/$

Gold price                     $937                            -$25 (-2.80%)                             $950- $990

Dow Jones                    8799                             36 (+0.41%)                              Increase

Nikkei                           10135 367                     (+3.77%)                                   Increase

FTSE-100                      4442 3                          (+0.08%)                                   Increase

Hang Seng                    18791                           210 (+1.12%)                             Increase

SA Property Index          291                               -3 (-1.02%)                                Volatile

Capital market (ALBI)     288945                          3557 (+1.25%)                           Increase

Global share markets displayed uncertainty last week, but ended the week in positive

territory. Uncertainty if US, Europe and the East Asian economies are on a brink of a

strong increase in consumer demand lead to investors remaining cautious.

Moreover, the uncertainty regarding the actual reasons for the sharp increase in oil

prices to beyond $72 per barrel caused indecision in the movements of other

commodities.

A sell-off of most other commodities last Friday lead to the sharp decrease in Gold and

Platinum prices at the close on Friday. In reaction the Resources top-20 lost more than

2.4% last week, pulling the ALSI down to under 23 000 on Friday. The financial index ended

0.6% higher, whilst industrials closed flat, gaining only 0.13%. The listed property market

(SAPY) lost 1.02% over the week due to amongst others uncertainty on the mooted

takeover by Redefine of some of the other listed property companies (like Apex). The

stronger rand boosted bond yields as the All Bond Index (ALBI) ended the week in the

green by 1.25%. According a poll done by Market Watch the economic data for the USA 

in the coming week should show further declines in the manufacturing side of the economy

and a small improvement in home building. The data should also show increased inflation due

The Tax Season for Individuals begins on 1 July 2009. Welcome to our one-stop page for Tax Season 2009 information, please read further for more information, frequently asked questions and please contact us if you need any help.

Last year's tax season confirmed electronic channels as the preferred method of submission by taxpayers. Just two years after the introduction of electronic submission for individual returns, over 86% of all returns were submitted via either the SARS eFiling system or electronically at SARS branches.

Tax Season 2009 for Individuals - what you need to know:

• A Customised, pre-populated return!

• No returns for those who earn less than R120 000!
  
  Taxpayers earning up to R120 000 a year from a single employer and who have no additional income or deductions beyond those reflected on their tax certificates don’t have to submit a tax return!

• The language of your choice!
  
  In order to create better understanding, the Income Tax return (ITR12) and associated communication and correspondence will be available in six official languages.

• Ask for your unique tax return from 1 July 2009
  
  You can request an ITRR (Income Tax Return Request) from 1 June 2009. The ITR12 (Income Tax  Return) is only available from the start of Individual Tax Season, 1 July 2009. To make sure you receive only the fields you need on your customised, pre-populated return we need you to request your return. You will be able to do this via the following channels:
  • www.choicefinancials.co.za
  • At any SARS branch
  • Via the SARS Contact Centre
  • By filling out a simple return request form (ITRR) that will be posted to non-eFiling taxpayers

• Electronic Online Tax Calculator
  
  An electronic tax calculator will be made available via the SARS website and eFiling to assist taxpayers to calculate their assessed liability according to the declarations on their tax returns. It will assist you in ensuring that your return is accurately completed and prepare you in the case of any added liability.
  

Welcome all South African Income Tax payers living in SA and abroad.
We can assist you in making an extra monthly income. Choice Financial consultants have launched a new product line called the Choice Network.
Now they offer their valued clients part of the network to earn themselves a monthly income.

They have pre-launched a while ago, and the response was so good that they had to obtain additional programs just to keep up with the demand. Choice Financial Consultants believe that clients are the lifeblood to their existence, and are now reimbursing their loyal supporters on a monthly basis for their contribution. It really started off well and there are already people who started their extra monthly income. Should you wish more information or have questions, simply e-mail to admin@choicefinancials.co.za or leave a message right here. You too can make some serious extra money this way on a monthly basis.

We have compiled a report to assist you with your decision to join the network. You can download a copy for free (no-charge) at http://sites.google.com/site/choicenetwork, It will be one of the best things you ever did in your life...