What To Expect From A SARS Audit

0

An increased National Budget mixed with a toiling economy means the South African Revenue Service (SARS) is under pressure to meet revenue targets.

But does this mean more of us should expect an audit this tax season?

Are You More Likely To Be Audited By SARS in 2017?

KPMG revealed insights from respondents to their recent global tax disputes benchmarking survey. Director for corporate tax and legal at KPMG South Africa, Roula Hadjipaschalis, reports that SARS is expecting taxpayers to surrender all of the tax in dispute.

According to the survey, SARS has been conducting more audits. SA respondents were also experiencing more difficulty reaching resolutions with the tax authorities, than other respondents. Hadjipaschalis also reports Sars is using increased aggressiveness with respondents noting a greater use of formal powers to obtain information.

SARS revised its revenue collection estimates from R1.175 trillion in February 2016 down R30 billion to R1.114 trillion in February this year. This is the second multibillion shortfall since the 2009/10 financial year.

In April this year, SARS said that the largest contributor to their sources of tax revenue was personal income tax (PIT), which accounts for 37.2% of total revenue.

How Do You Know If You’re Being Audited?

According to information provided by SARS, you will be formally notified if you’re selected for audit through an official letter. The letter will list all of the relevant supporting documents they require to verify taxpayer financial and accounting records.

Documents requested may include:

  • Travel log book;
  • Receipts of medical expenses paid for by the taxpayer;
  • Medical certificates;
  • Retirement annuity certificates;
  • Financial statements.

Once you’ve been notified, you have 21 business days to send SARS the requested documents. Include the original letter sent by SARS which contains a unique bar-coded reference linked to your tax records.

What Happens Next?

Being selected for an audit doesn’t immediately signify you’ve done anything wrong as selections are often random, or cyclical.

The most important thing to remember is that you need to respond with the documents. If you do not, SARS will eventually raise an assessment based on information at hand.

If a decision or assessment has been made post audit that you disagree with, you may lodge an objection via eFiling. Your objection must be submitted within 30 business days of the date of the assessment.

It is also important to note that should you be due for a refund (or tax rebate), that it will be suspended until the audit is complete.

SARS have 60 working days to finalise audits once your documents have been submitted.

Read more at CompareGuru

Share.

About Author

CompareGuru is the first truly independent online platform in South Africa that sources and provides a comprehensive comparative service of product options, with a focus on financial services including banking and insurance, as well as mobile and broadband. Through regular and in-depth market research, CompareGuru provides side-by-side comparisons that help consumers make informed decisions. At CompareGuru, we believe in the maxim that knowledge is power, and we strive to maximise the value for each consumer with clear, concise and up-to-date information. For more information visit http://compareguru.co.za/.