The 2024 tax-filing season officially started on 15 July, and many taxpayers have already received a notification that they have been auto-assessed.
The South African Revenue Service (SARS) rolled out auto-assessments in batches from 1 to 14 July. Individual taxpayers who are not being auto-assessed can submit their tax returns.
SARS has published the dates for the 2024 filing season:
- Individual taxpayers (non-provisional): 15 July to 21 October 2024.
- Provisional taxpayers: 15 July 2024 to 20 January 2025.
- Trusts: 16 September 2024 to 20 January 2025.
SARS has been auto-assessing a swathe of taxpayers with less complex tax affairs for the past three years. The estimated assessments are based on third-party data provided to SARS by employers, banks, investment companies, medical schemes, and retirement funds.
Taxpayers who agree with the assessment do not have to respond. However, KPMG tax experts advise taxpayers not to accept the automatic assessments without thoroughly reviewing the correctness of the data.
SARS may still be in the process of populating data received from all their third-party data providers. “In some cases, SARS may have limited access to certain third-party information that may impact the disclosure in a taxpayer’s tax return,” they note.
Who is liable for tax
A person becomes liable for income tax if they are under the age of 65 and their gross income exceeds R95 750; if they are between 65 and 74 and their gross income exceeds R148 217; and if they are 75 or older and their gross income exceeds R165 689.
Pieter Botha, the founder of Fintax and an independent tax adviser, says a taxpayer on a relatively low income could have no employees tax (PAYE) deducted but could conceivably have substantial investment income, which would make the taxpayer liable for income tax.
Taxpayers who have PAYE deducted will probably be issued with an auto-assessment if they have no other significant sources of income. If SARS does not issue an auto-assessment, Botha advises taxpayers to file a tax return in any event, to prevent administrative penalties and needless communication and objections to rectify their situation.
The provision that taxpayers with remuneration income not exceeding R500 000 do not have to submit a return is restrictive. It applies only where the taxpayer has income from one employer and does not receive any other allowances or income, such as a travel allowance, rental income, business income, or investment income.
Botha adds that taxpayers who make use of this provision generally have no allowable deductions, such as medical scheme or retirement annuity contributions.
Again, Botha urges taxpayers to file a tax return and avoid a long communication process with SARS should the system flag them for non-compliance and raise penalties for non- submission of returns. The “system” will be left to decide on the status of the return, but the ultimate responsibility remains with the taxpayer.
Renewable energy deductions
Doné Howell, a tax director at BDO, says a significant change in the 2024 filing season is taxpayers’ ability to claim a rebate in respect of the solar energy tax credit or a tax deduction in respect of the renewable energy tax incentive.
In the case of the residential solar rebate, individual taxpayers can claim a rebate to the value of 25% (to a maximum of R15 000) of the cost of new and unused solar panels acquired and brought into use for the first time between 1 March 2023 and 29 February 2024. The panels must have a generation capacity of not less than 275W each.
The other conditions are:
- The solar PV panels must form part of a system connected to the distribution board of a residence that is mainly (more than 50%) used by the individual for domestic purposes.
- An electrical certificate of compliance must have been issued for the residential property (in terms of the Electrical Installation Regulations, 2009) after the solar PV panels were installed.
- The solar energy tax credit applies to the 2024 year of assessment only and the amount allowed as a deduction will be 25% of the cost of the solar PV panels up to R15 000.
- Batteries, inverters, fittings, the installation costs, and portable panels do not qualify for the deduction.
- A deceased estate does not qualify for solar tax credit.
Refer to this page on the SARS website for more information about the solar panel rebate for individuals.
Other significant changes
SARS reminds taxpayers of the pro-rata deduction in respect of contributions to retirement funds relating to changes in Income Tax Act. If a taxpayer’s year of assessment is less than 12 months, the amount stipulated in the Act used to calculate the allowable retirement contribution deduction must be adjusted. The maximum allowable retirement contribution deduction is R350 000.
The same pro-rata deduction for tax-free investments applies if the taxpayer’s year of assessment is less than 12 months. The annual tax-free investment contribution limit is R36 000.
Botha says the provisions regarding pro-rata deductions in certain instances are particularly relevant to taxpayers who emigrate and exit as South African-resident taxpayers from a certain date.
“This necessitates an adjustment in deductible expenses and contributions. This is a further refinement to the process of emigration where the taxpayer exits the South African tax jurisdiction, and the effective date happens within the tax year.”
SARS also reminds taxpayers of the necessity of completing the details of partners to align with the beneficial owner requirements.
“Beneficial ownership is crucial for tax administration because it helps ensure transparency and accountability in financial transactions. By identifying the individuals who ultimately benefit from an asset or income, tax authorities can accurately determine tax liabilities and prevent tax evasion.”
Taxpayers who disagree with their assessment can correct it either on the eFiling or MobiApp platforms. The updated or corrected return must be filed before the 21 October deadline for non-provisional taxpayers.
Amanda Visser is a freelance journalist who specialises in tax and has written about trade law, competition law, and regulatory issues.
Disclaimer: The views expressed in this article are those of the writer and are not necessarily shared by Moonstone Information Refinery or its sister companies. The information in this article does not constitute financial planning, legal or tax advice that is appropriate to every individual’s needs and circumstances.
