
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 | |
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|
|
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) |
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|
|
TAX REFUND | – | (R7,440) |
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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.