Don’t Lose Out This Tax Season (2019)

Posted by Bernard Schoeman on 14 June 2019.



Bernard Schoeman

CA(SA), Post Graduate Diploma Accounting, BCom

The Tax Shop Head Office

More about Bernard Schoeman

Bernard studied BCom majoring in information systems and accounting at the University of Cape Town and qualified as a Chartered Accountant (SA) in 1997 after completing of his articles with Deloitte & Touche. Bernard has extensive international and local experience having worked for nearly three years with financial institutions in the UK (London) and having audited numerous companies listed on the JSE in South Africa. He is a member of the South African Institute of Chartered Accountants.

SARS has indicated that taxpayers who meet ALL of the following criteria need NOT submit a tax return for 2019:

  • Their total employment income for the year before tax is not more than R500 000.
  • They only receive employment income from ONE EMPLOYER for the full tax year.
  • They have no other form of INCOME (e.g. car allowance, business income, and rental income, taxable interest or income from another job).
  • They don’t have any additional allowable tax related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).
  • The reality is that most taxpayers who earn employment income of less than R500,000 and who work for a single employer and who do not have any other sources of income will NOT submit a tax return. Many taxpayers who meet these requirements are under the misguided belief that it’s not worthwhile submitting a tax return. This has been evidenced by the level of submissions in previous years where SARS also allowed significant income thresholds for not having to submit a tax return.

However, most taxpayers have allowable tax deductions through contributions to medical aid funds, pension, provident and retirement annuity funds which will, more than likely, result in a tax refund to the taxpayer, but are lost forever by not submitting a tax return. Let’s take a look at an example.

For the year ended 28 February 2019, a taxpayer (under the age of 65) earns o salary of R15,000 per month and contributes R500pm to a medical aid fund (for taxpayer and their spouse). As the taxpayer only works for one employer and does not have any other forms of income they elect not to submit a too return (also because their annual income amounts to R180,000 which is well below the threshold of R500,000). The taxpayer will lose out on the following refund:

Tax Return Tax Return
Not Submitted Submitted
Annual income R180,000 R180,000
Annual tax calculated R18,333 R10,893
Employees tax (PAYE) withheld by employer during the year (R18,333) (R18,333)
TAX REFUND – (R7,440)

The above example is a simple one, but is a good illustration of how the average taxpayer will lose out this tax season. The lost refunds will be even greater if the taxpayer had made contributions to a pension, provident or retirement annuity fund.

Make sure you don’t lose out this tax season by contacting a Tax Shop near you.

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