Tax payment deadline looms
30 March 2012
Posted by: SAIT Technical
Tax payment deadline looms
The South African Revenue Service (SARS) on Wednesday reminded taxpayers with payments due that the deadline for tax payments is Friday, March 30, not March 31, which is a non-working day.
SARS is expecting payments of several billions of rands on Thursday and Friday this week with more than R30 billion expected to be banked on Friday alone, making it the third largest revenue collection day in SA’s history.
This daily record for collections was exceeded on only two occasions previously, June 30 2011 with R36.7 billion and December 31 2011 with R38.7 billion. The bulk of revenue for the remaining days of this week were anticipated to be from companies paying provisional tax and VAT collected from vendors and importers.
One of the reasons for the 22.6% year on year (y/y) rise to a record R102.065 billion in SA government revenue in December 2011, was that consumers were panicking that the rand would continue weaker in 2012 after it lost 20% of its value in the months after July 2011. The rand weakened from a monthly average of 6.79 per US dollar in July to 8.16 in November. It is now trading at 7.62 per dollar. The panic buying to beat potential price increases of imported goods resulted in Value Added Tax (VAT) collections soaring by 30.5% y/y to R18.2 billion. Import VAT jumped by 37.1% y/y to R9.4 billion, while customs duties on imports surged by 34.3% y/y to R3.1 billion.
The panic buying has led to a far better than expected increase in revenue as VAT collections were only expected to rise by 2.1% in the 2011/12 fiscal year compared with the 2010/11 fiscal year. As government expenditure only increased by 5.1% y/y in December to R81.124 billion there was a R20.941 billion surplus in December 2011 compared with only a R6.07 billion surplus in December 2010. December is the month when many companies pay their tax so company tax of R46.65 billion exceeded personal income tax collections of R21.52 billion.
This means that the Treasury is on track to have a smaller deficit in the 2011/12 fiscal year, which ends in March, than the 2010/11 fiscal year as the deficit in the first nine months of the 2011/12 fiscal year narrowed to R121.264 billion compared with R128.975 billion in the first nine months of the 2010/11 fiscal year. SARS warned taxpayers that only payments banked to SARS on the last working day (Friday March 30 2012) would be reflected as paid on time.
Taxpayers utilising the payment authorisation on the eFiling system should note that "debit pull” payment instructions issued after 18:00 on March 30 2011 will NOT be banked on the same day and can result in penalties and interest charges for late payments. To eliminate uncertainty and avoid any risk of late payment SARS urges all taxpayers to pay by no later than 14:00 on Friday, March 30 2012.
In the 2012 Budget in February, the minister of finance set a revised revenue collection target of R738.7 billion for SARS for the 2011/12 fiscal year. The minister of finance is scheduled to announce the preliminary outcome of the revenue collection for the year on April 1 2012.