Monthly tax certificate submissions

Monthly tax certificate submissions

Business, Human Resources, Tax

SARS intention to modernise the technical capability of their systems, where ‘data-driven insights, self-learning computers, artificial intelligence and interconnectivity of people and devices’ are key to the process, is no secret.

Since February 2020, SARS has been pushing their ‘Vison 2024 PAYE’ project. A very important player in this process is the payroll systems’ suppliers and the Payroll Authors Group of South Africa (PAGSA). These parties would need to work with SARS to understand their intentions and identify the practical implications and complications on payroll administration.

SARS has stated that third party data and personal income tax administration reform will continue over the medium term, with a view to reducing the administrative burden for employers, payroll administrators, SARS and individual salaried taxpayers. One of the first steps in this process was giving pensioners the option to agree to more accurate PAYE withholding rates to deal with multiple sources of income. SARS has also enabled 2.9 million individual taxpayers to be auto-assessed, without the need to file personal tax returns.

The next step in the process is the provision of fully automated employer and employee data on a monthly basis. In the near future the employer annual PAYE reconciliation will fall away, and the new process will be extended to third-party data providers.

SARS, PAGSA and other third-party bulk suppliers of tax certificates are all working on a monthly PAYE business requirement specification that will cover the technical requirements for monthly tax certificate creation and submissions. Additional reporting fields are being added and changes to the file structure and records are under way. Other important areas of administration under discussion are the channels of submission, the reporting of corrections, and the possible impact on the EMP 201 declaration process. We are expecting more information to be made public as discussions are finalised.

Payroll suppliers will need to make significant changes to their payroll systems to accommodate the monthly requirements. There will also be a lengthy testing process. Expect extensive communication between payroll system suppliers and payroll users prior to the new system being introduced.

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