T Manuel on changes to income tax return submission

9 May 2007

Johannesburg: The South African Revenue Service (SARS) today announces
significant changes to how South African taxpayers submit their income tax
returns.

The new, simplified submission process and the redesigned Income Tax return
will make it considerably easier for individual and business taxpayers to
complete and file their returns. At the same time it is intended to ensure
greater efficiency and faster turn-around times to SARS internal processes in
capturing, verifying and assessing the information submitted by taxpayers.

SARS remains conscious of the fact that these changes will require
behavioural changes among registered taxpayers who have become accustomed to a
filing process with a single annual deadline for submissions in July.

SARS will remain conscious of the increasing demands of a growing tax base
to the organisation and will continue to improve its systems. Over the past
decade the tax register has grown year-on-year by between 8% and 12%. The
growth in the tax register, as well as ever improving levels of compliance, is
a positive trend that bodes well for ensuring a sustainable revenue base.

The number of returns that need to be assessed every year has reached
unprecedented volumes, and will continue to grow at around 8% per year over the
next three to five years. This volume growth places a tremendous strain on the
current capacity and is challenging the service level promised in the SARS
Service Charter.

The changes outlined below represent the beginning of an exciting new
journey in the interaction between SARS and seven million registered taxpayers
– five million individuals, 1,7 million companies and 300 000 trusts.

The new submission process introduces the increased use of new information
technology solutions that will ensure a far less burdensome filing experience
to taxpayers. In this regard, for example, taxpayers this year will NOT be
required to include ANY supporting documents – IRP5, IT3 forms from financial
services providers, receipts of medical expenses, logbooks or petrol slips – to
their income tax returns.

Taxpayers, however, need to ensure that they keep such supporting documents
for a period of five years should the need arise for SARS to request them.

Details of changes:

1. New design of Income Returns: a simpler form; reduced pages; no
supporting documents; no calculations.
2. Address verification: Returns will be posted. If a taxpayer has not received
a return by end of August, contact the SARS call centre – 0860 12 12 18.
3. Access to returns: Simpler registration for eFiling:
http;//www.sarsefing.co.za. Returns will be posted, available on DVD to
employers or available at branch offices.
4. Preparation for filing: Period 9 May to 15 July 2007 – time to collect
information required to fill in return.
5. Filing and submission: Individuals will receive returns by middle of July –
deadline for submissions for individuals: 31 October 2007.
Companies will receive returns in September 2007 – deadline for submissions for
companies: 6 to 12 months after their financial year.
6. eFiling: benefits include faster turn-around times, delayed payments,
automated objections; eFiling expanded to all income tax returns.
7. Keep track of your return: Taxpayer can obtain information on progress of
return; call centre and branch offices to assist taxpayers.
8. Risk detection and profiling: New statistical methods to identify risk;
automated risk profiling and validation; enhanced ability to identify errant
taxpayers.
9. Turnaround time on assessments: Quicker assessments and refunds; electronic
submission (eFiling) will give quicker, more accurate assessment
10. Objections: Can be lodged electronically via eFiling; will speed up
process.
11. Payments and refunds: Paid electronically to taxpayer's bank account; no
cheques will be issued, unless motivated.

For SARS the changes announced today is the start of a three year process of
innovation that will introduce a number of improvements as the administration
will endeavour to provide continuously improving services to South African
taxpayers.

As part of its mandate SARS has an obligation to ensure that it has the
requisite organisational capacity to effectively respond to the expected growth
trends. I hope South African taxpayers will join us on this exciting
journey.

Enquiries:
Adrian Lackay
SARS Communications
Cell: 083 388 2580

Issued by: South African Revenue Service (SARS)
9 May 2007