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Making Peace with the Taxman
For many South Africans, the opening of Filing Season triggers anxiety. The fear of an audit, a large bill, or administrative chaos is real. But thanks to the South African Revenue Service’s (SARS) digitization, filing your return via eFiling or the SARS MobiApp is smoother than ever—if you are prepared. Understanding how the system works can save you money and keep you out of trouble.
Auto-Assessments: Check Before You Accept
SARS now issues “Auto-Assessments” to millions of taxpayers. They use data from your employer, medical aid, and bank to calculate your tax for you.
The Trap: If you blindly accept the auto-assessment, you might miss out on deductions SARS doesn’t know about (like additional medical expenses, travel logs, or donations).
The Action: Log in to eFiling. Review the data. Only accept if you are 100% sure it reflects your full financial picture. If not, edit the return and file it yourself.
Maximizing Your Deductions
You work hard for your money; don’t pay more tax than required. Legitimate deductions include:
- Retirement Annuity (RA): This is the biggest tax break available. You can deduct contributions up to 27.5% of your taxable income (capped at R350,000 per year). If you haven’t maxed this out by February (tax year-end), consider a top-up.
- Medical Tax Credits: You get a fixed monthly credit for yourself and dependents on medical aid. Plus, you can claim for “out-of-pocket” qualifying medical expenses not covered by the aid. Keep those pharmacy receipts!
- Donations: Donated to a registered Public Benefit Organisation (PBO)? If you have a Section 18A certificate, you can deduct up to 10% of your taxable income.
- Home Office: This is strict. You can only claim if you have a dedicated room used exclusively for trade (work). Working from the dining room table doesn’t count.
The Travel Logbook
If you receive a travel allowance, you must keep a logbook. No logbook, no claim. SARS is extremely strict on this. You need to record the opening and closing kms, and for every business trip: the date, destination, reason, and kms travelled. GPS logbook apps make this easy.
Provisional Taxpayers
If you earn income other than a salary (e.g., rental income, freelancing, interest income above the exemption), you might be a Provisional Taxpayer. This means you must file two returns a year (August and February) and pay tax in advance. Missing these deadlines attracts hefty penalties (10% or more).
Administrative Penalties
SARS has become aggressive with non-compliance. Even if you don’t owe any money, if you fail to file a return, you can be fined heavily for every month it’s outstanding.
The Rule: Always file, even if it’s a nil return. Ensure your personal details (address, bank account) are updated on eFiling.
Scam Alert
During tax season, phishing scams skyrocket. Emails claiming “SARS has issued a refund, click here” are almost always fake. SARS will never ask for your banking login details or ask you to click a link to receive money. Always log in directly to eFiling to check for correspondence.
Conclusion
Tax is an obligation, but it shouldn’t be a nightmare. Keep your records organized throughout the year, leverage your RA contributions, and treat the filing deadline as non-negotiable. When in doubt, pay a registered tax practitioner—their fee is often covered by the tax savings they find for you.
