THE DISCREPANCY SMS FROM SARS

In an attempt to enhance its efforts to further simplify tax return filing, SARS has announced earlier this year, that they will assess a significant number of  individual taxpayers automatically. We are aware of some messages being sent directly to you from the South African Revenue Services. This message states that there are discrepancies identified between third party data and your last income tax return submitted. Please note that this is a standard message being sent to taxpayers due to a lack of correct information sent to SARS by third parties.

AUTO ASSESSMENT SYSTEM

Some taxpayers may have received communications indicating they will be auto-assessed. The SMS or e-mail communication directs you to eFiling or the SARS MobiApp to either “Accept” or “Edit” the return. We would, however like to request you to not respond to the communications as we will be managing this on your behalf and we need to make sure all the necessary deductions and other items have correctly been assessed before accepting their effort.

NEW SCAMS AND SPOOFING COMMUNICATION

We would like to warn you about a number of new scams and spoofing communications that appear to be from the South African Revenue Service (SARS) or collection agencies claiming to collect outstanding taxes on behalf of the South African Revenue Service (SARS). The latest scam has seen members of the public contacted with false e-mails and personal SMS messages made to look like they were sent from the revenue authority. The revenue authority did warn the public in the beginning of 2020 of these type of fraudulent e-mails and personal SMS messages, aimed at enticing unsuspecting taxpayers to part with personal information such as bank account details.

Examples include e-mails and personal SMS messages that appear to be from returns@sars.co.za or refunds@sars.co.za indicating that taxpayers are eligible to receive tax refunds or that a certain amount is payable to SARS. These e-mails contain links to false forms and fake websites made to look like the real thing, but with the aim of fooling people into entering personal information such as bank account details which criminals then extract and use fraudulently.

When receiving these fraudulent e-mails or personal messages, take note of the following:

• Do not open or respond to e-mails or personal SMS messages from unknown sources and immediately delete it;
• Beware of e-mails and personal SMS messages that ask for personal, tax, banking and eFiling details (login credentials, passwords, pins, credit/debit card information);
• SARS will never request your banking details in any communication that you receive via post,

e-mail, or SMS. However, for the purpose of telephonic engagement and authentication purposes, SARS will verify your personal details. Importantly, SARS will not send you any hyperlinks to other websites – even those of banks;

• Beware of false SMS’s;
• SARS does not send .htm or .html attachments;
• SARS will never ask for your credit card details.

Should you have any additional concerns regarding the information you have received from SARS thus far, please contact us immediately for further assistance or peace of mind.

Office number – 013 655 4100

Imstax1@imsafrica.net

Imstax2@imsafrica.net

Valid till thursday (25 June)

In support of the President’s call to the Covid-19 pandemic, that Social Distancing be observed at all times and that we should at most stay indoors and limit movement, SARS is responding by rapidly enhancing its efforts to further simplify the tax return filing requirements for individual taxpayers and removing the need to travel to our Branches in 2020.   Through the increased use of third-party data, SARS will be completing your tax return for you more accurately than ever. Where we have the required information we will provide you with a proposed assessment without the need to file a tax return. This enables you to view, accept or edit your proposed assessment from the comfort of your home or place of work using eFiling or SARS MobiApp.

Individual income tax return filing dates

• 1 September to 16 November 2020: Taxpayers who file online
• 1 September to 22 October 2020: Taxpayers who cannot file electronically can do so at a SARS branch by appointment
• 1 September 2020 to 31 January 2021: Provisional taxpayers who file electronically.

Individual filing opening

No need to call

We will do the filing for you

The SA Reserve Bank has slashed the repo rate by 275 basis points this year to provide relief to indebted consumers and businesses as they navigate the economic shock of the coronavirus pandemic. But the central bank is slowly running out of space to further lower interest rates in response to the crisis, says Governor Lesetja Kganyago.

Kganyago was speaking during a webinar on Sunday evening about the impact of Covid-19 on South Africa.

Responding to a question about whether the bank has done enough to cushion the pandemic’s blow on the economy, Kganyago said buffers the bank had created in the past granted it greater leeway to respond by, for instance, cutting rates.

“We had buffers and we could dig into the buffers,” he said.

“There are 68 central banks in the world which adjusted the policy rate. We are among the ones which adjusted most aggressively. Partly because we had the space to do it.” But the governor said the bank was beginning to run out of space to further lower rates.

The bank lowered the repo rate from 4.25% to 3.75% last week, a level last seen in the 1970s. At the time Kganyago said rates may fall by a further 50 basis points over the next two quarters. BNP Paribas, meanwhile, believes a staggered rate cut of 75 basis points in the current cycle is likely.

With inflation close to the midpoint of the bank’s 3% to 6% target band, the Reserve Bank could initially rapidly lower the repo rate to deal with the shocks created by Covid-19. “We had that buffer to dig into and inflation was contained,” he said.

The rate cuts eased some pain for consumers, but the effects have not yet been felt on the economy, which is still on lockdown, Kganyago added.

The governor said the central bank had also built in buffers in the regulatory framework for the financial sector by, for example, placing liquidity and capital requirements on banks. These requirements were lowered after the pandemic struck, meaning bank’s could dip into these reserves.

“We could relax regulation in support of the banking sector, which was providing relief to businesses and households,” said Kganyago.

The Reserve Bank has partnered with National Treasury and large private banks to launch a R200 billion loan guarantee scheme to extend loans to businesses with an annual turnover of less than R300 million for operational expenses, Fin24 previously reported.

The bank also responded to the crisis by injecting liquidity into the markets by buying more SA government bonds to deal with ‘dysfunction’.

An arsenal of instruments 

“Monetary policy had put us in a situation, where we did not just deploy one instrument at a time. We could deploy an arsenal of instruments, in accordance with our mandate, to ensure the SA economy is actually cushioned from the shock experienced from Covid-19,” he said.

The pandemic had also exposed the structural flaws of the SA economy, said Kganyago.

“We were hit by the shock and the SA economy had significant structural flaws that we kept on talking about instead of dealing with,” he said. Kganyago said the time had come to reposition the SA economy. Instead of working towards a world after Covid-19, which won’t happen until a vaccine is found, South Africans should rather focus on managing the economy in the “era of Covid-19”, he said.

In recent weeks, the South African government and various private sector players have implemented interim measures to curb the immediate and longer-term effects of the Covid-19 pandemic on business and industry.

At this moment, funding relief measures are not available for all sectors. However, to make the process easier for small business during this unprecedented time, we have compiled a ‘funding directory’ to assist in making your search simpler.

Please note the Sukuma Relief Programme – launched with an R1 billion donation from Johann Rupert – has now been closed to new applicants.

The UIF applications are open, however, there has been a delay in payments due to a number of applications coming through and the majority of those being processed are found to have incomplete application documents.

As the ministers from each department update on how the new funding relief measures announced by President Cyril Ramaphosa on Tuesday evening will work, the funding details below will be updated.

A long list of interventions have now been introduced to help South African businesses and individuals through a crippling coronavirus-induced economic crisis.

Here’s what is currently available, and where you can find help.

All businesses

Tax breaks:

Companies can now claim back up to R1,500 a month per employee who earns less than R6,500 (for those younger than 30), and R750 for those 30 and older. These amounts will be paid back every month by the SA Revenue Service (Sars) as part of the Employment Tax Incentive (ETI) programme. Read more.

UIF payouts:

As part of the special Temporary Employee/Employer Relief Scheme (TERS), administered by the Unemployment Insurance Fund (UIF), companies can apply for money to help pay their workers. The payment will be a percentage of an employee’s salary, according to a legislated sliding scale from 38% (for the highest earners) to 60% (for the lowest earners). The maximum benefit is R6,730 a month. Companies struggling to pay salaries due to the Covid-19 crisis need to apply on https://uifecc.labour.gov.za/covid19/.

READ | Claiming money from the UIF: Everything you need to know

Delay in payment of provisional tax:

Instead of paying 50% of their expected tax bill six months into the tax year (and then settling the full amount at the end of the tax year) companies are now allowed to pay only 15% after six months, and another 50% by the end of the tax year. Then, by 30 September 2021 (or six months after the end of its financial year), the company needs to pay the outstanding balance. This option is only for companies with an annual turnover of less than R100 million. Read more.

Delayed employee tax payments:

Businesses with an annual turnover of less that R100 million (up from R50 million previously) can also keep back 35% (up from 20% before) of the pay-as-you-earn (PAYE) payments they were supposed to hand over to the SA Revenue Service (SARS) for the next four months. But they will have to pay back this amount in equal instalments, with the first payment expected on 7 September 2020. Read more.

No tax penalties for some companies:

Companies that can show they are incapable of making payment due to the crisis, can apply to Sars to defer tax payments without incurring penalties.

Skills development levy holiday:

From 1 May 2020, there will be a four-month holiday for skills development levy contributions (1% of total salaries).

Carbon tax liabilities:

South Africa’s the first carbon tax payments were due by 31 July 2020 – this has now been delayed to 31 October 2020.

For small and medium-sized businesses

Government funding:

There are two main government schemes aimed at small businesses. The Debt Relief Finance Scheme will assist distressed small companies with funding. Then there is the Business Growth/Resilience Facility aimed at small companies which can take advantage of supply opportunities resulting from the coronavirus pandemic or a shortage of goods in the local market. For both of these, companies first need to register at https://smmesa.gov.za/. Further details to apply for both schemes are due soon. (Money will be paid out within seven business days after an application has been approved, the department of small business development promised.)

Fast-tracking of VAT refunds:

Smaller VAT vendors can claim VAT monthly instead of once every two months.

Help for different sectors:

Tax holiday for booze and cigarette companies

Alcohol and cigarette companies received 90 days extra to pay excise duties that were due in May and June.

Small farmers:

Financially distressed small-scale farmers who have an annual turnover of between R20,000 and R1 million can apply for help from a fund totalling R1.2 billion in government funding.

Tourism companies:

The Department of Tourism will pay once-off grants of R50,000 to approved small and medium enterprises. Applications will be evaluated by a panel of experts – and black empowered companies will get preference.

IDC funding:

The Industrial Development Corporation (IDC) has allocated billions in emergency funding to help manufacturers with working capital, as well as for companies in agriculture, tourism, energy, and vehicle components manufacturing.

Film industry:

The National Film and Video Foundation (NFVF) has invited the industry to submit funding applications for script development, animation, and post-production projects. The call for these applications was supposed to have opened in August, but this has been hastened “to keep the industry busy during this downtime”. The NFVF will also provide a once-off cash injection of R500,000 to the ten companies currently commissioned by the organisation.

Musicians:

The South African Music Performance Rights Association (SAMPRA) has brought forward the distribution of royalties scheduled for August 2020 to April 2020.

Minibus taxi owners:

SA Taxi, which finances more than 32,000 minibus taxis, has announced a repayment holiday of a month (from April 1) for its clients.

Insurer suppliers – including plumbers and panel-beaters

Some of the large insurers have allocated money to assist their suppliers. OUTsurance, for example, will assist some of its service providers – which have a turnover of less than R50 million per year, and and saw the value of work allocated by OUTsurance drop by more than 50% during the period April to June 2020 – with financial support. Other requirements also apply.

Spaza shops:

Government’s new support scheme for spaza shops will give them funding to buy stock and assure bulk-buying discounts at approved wholesalers. But the spaza shops need to be registered with the SARS, the Unemployment Insurance Fund, and the Companies and Intellectual Property Commission (CIPC). Read more.

For the self-employed

Delay in payment of provisional tax:

Instead of paying 50% of their expected tax bill six months into the tax year (and settling the full amount at the end of the tax year) provisional taxpayers only have to pay 15% after six months, and another 50% by the end of the tax year. Then, by 30 September 2021, they need to pay the balance. While it hasn’t finalised which individuals would be eligible, Treasury says that it will probably be those who have a turnover of less than R5 million and don’t earn more than 10% of their turnover from interest, dividends, foreign dividends, rentals from letting fixed property and pay received from an employer.

For individuals

UIF unemployment claims:

If you lost your job during the crisis, you should be able to claim from the UIF.

Credit insurance:

You may have insurance on your home loan, credit card, or short-term loan that could cover your repayments if you lost your income during the coronavirus crisis – without even knowing about it.

Credit insurance would traditionally pay your outstanding debts if you die or are permanently disabled. But in 2017, new legislation was adopted in South Africa which means that credit insurance must also cover your repayments – for up to 12 months – if you are unemployed or unable to earn an income, and not necessarily due to illness.

You can take out credit insurance on most debt products including card accounts, home loans, your overdraft, and vehicle finance. But it is not always mandatory, so you need to check whether you have credit insurance in place.

READ | What you need to know about credit insurance – which may repay your loans during this crisis

Help from banks:

South Africa’s big banks have also announced individual measures to assist clients, with some offering three-month payment holidays on home loans, vehicle finance, personal loans, and credit cards.

READ | All the help South African banks are offering consumers due to Covid-19

Help from insurers:

The insurers each offer different relief options – from Santam’s refund of 20% of premiums in April, to OUTsurance’s 15% cut in premiums in May. Find out more.

Retirees:

Government is allowing those who draw money from living annuity funds as income to immediately increase the amount they withdraw to a maximum of 20% per year (from 17.5%). They are also allowed to only with withdraw a minimum of 0.5% – from 2.5% in the past. “This will assist individuals who either need cash flow immediately or who do not want to be forced to sell after their investments have underperformed,” Treasury said in a document.

This article is updated with new information as received. Applications for the Oppenheimer South African Future Trust (SAFT) and Johann Rupert’s Sukuma Relief Programme have both closed.

The Bank brought forward its May meeting to Tuesday, and cut interest rates for the third time in 2020

The Reserve Bank has cut interest rates by one percentage point for the second time in just less than a month, bringing the repo rate down to 4.25% on Tuesday morning.

The 100 basis point (bps) cut on Tuesday follows a 100bps cut on March 19. In January, the Bank cut interest rates by 25bps.

The move comes amid a wave of cuts by global central banks in an attempt to offset the economic damage from the Covid-19 pandemic. According to the Bank this is the lowest the repo rate has been.

It also follows an announcement by President Cyril Ramaphosa on Thursday that SA’s 21-day lockdown has been extended until the end of April.

The cut is clearly a response to the extension of the lockdown, and the depth of SA’s impending recession is likely worrying the central bank, said Capital Economics chief emerging-markets economist William Jackson in a note.

“The government will undoubtedly have to do more to support households and companies facing a dramatic loss of income,” said Jackson. “But, with poor public finances likely to constrain the size of the response, monetary policy will have to do more of the heavy lifting.”

The rand weakened after the announcement, down 0.2% at R18.12/$ in morning trade. The R2030 government bond was stronger, with its yield falling 13bps to 10.78%. Bond yields move inversely to bond prices.