Nearly all tax refund reversals have been resolved, says SARS

The South African Revenue Service (SARS) says the problem with refund reversals will be fully resolved by today (29 July).

Some taxpayers have complained that refunds that were paid into their bank accounts have been reversed. It seems the problem was mainly experienced by Standard Bank clients. Some account-holders said they could not access their refunds despite providing the correct bank details to SARS.

In a statement last week, SARS said the refunds of 30 000 taxpayers were reversed.

SARS said it has worked through these reversed refunds, and 90% of all refunds have been released.

“By Monday morning [29 July], any remaining refunds will either be released, or taxpayers will be engaged to provide supporting documents where necessary. These are the normal processes in the validations of refunds. Notwithstanding the above challenges, SARS has, in line with its earlier commitment, paid out 83% of all refunds within 72 hours,” the revenue authority said.

SARS said it “sincerely apologises to all taxpayers for the inconvenience caused in this validation process”.

It said all refunds undergo a validation process, which could result in refunds being flagged for verification.

SARS explains that verification means it checks the information that taxpayers provide in a declaration or tax return. SARS compares this information against third-party data, financial and accounting records, and other supporting documents.

According to the SARS website, the following may result in the delay in the payment of a refund:

• When your banking details have been identified for verification, the process can take up to 21 business days from the date on which all the required supporting documents are received. Once the bank details validation process has been completed, the refund should be paid within 72 hours.
• If your income tax return is selected for verification, it may take up to 21 business days from the date on which all the required supporting documents are received to conclude a verification, whereafter the refund should be paid within 72 hours.
• Where returns for multiple tax years are submitted and are selected for audit verification, the verification process will be finalised within 90 business days from the date on which all the required supporting documents were received for all the tax years being verified.
• If your return is selected for an audit, it could take up to 90 business days from the date of receipt of all the required supporting documents in a complete and correct manner, unless alternative arrangements are communicated, whereafter the refund should be paid within 72 hours.
• If you have outstanding tax returns, the refund will not be paid until all the outstanding returns have been submitted.
• If your banking details are incorrect.
• If you have outstanding debt on your account, the debt equalisation process may be initiated to deduct an amount from your refund and pay towards any outstanding tax debt before any available credit is released.