In my previous post, we spoke about why should you should file a tax return. This was in terms the SARS requirements. We indicated that one should file if their total employment income / salary for the year (March 2017 to February 2018) before tax (gross income) was more than R350 000 and that you do not have to submit if you met a series of certain criteria. Please refer to the article linked above for more details.
Today we want to talk a bit more about why should you submit your tax return:
1. Planning to borrow.
A friend of mine recently went to a bank to apply for a mortgage bond. Do you know one of the things they asked for? They wanted her most recent ITA34. You know why? This may help the bank understand your earnings and can be used to justify what you say you earn (assuming you are honest enough to disclose all your income). Second reason, lenders may request your tax clearance. If all your submissions are not up to date, you may not be able to get this.
2. Obtaining a tax clearance
As mentioned above you may want to get a tax clearance to in order to obtain funding. Also, Exchange control regulations, which allow individuals to transfer R10 Million out of South Africa each year as part of their Foreign Investment Allowance, requires a taxpayer to obtain a SARS Tax Clearance Certificate. If your tax affairs are not in order, you may not be able to get a tax compliance certificate.
3. Tax practitioner status
If you are practising as a tax practitioner it would be in your best interest to ensure that your tax affairs are in order. SARS and most controlling bodies now require that tax practitioners tax statuses are compliant for them to remain practicing as tax practitioners. Failure to meet this requirement could lead to one being de-registered as a tax practitioners and not being able to practice for up to six months.
4. Missing out on a tax refund:
Why must anyone pay a single cent more than what they should pay over to SARS? If you have any retirement annuity contributions or medical aid, you should see that you make your claims. You should also make sure that, where you keep a travel logbook, you claim for that business travel. These things could easily trigger a refund. If you are not sure how you can get a refund, please contact usfor help.
5. Accessing your retirement funds
Keeping your tax affairs up to date will ensure you will get your retirement funds without much delays. You will not need time to catch up with submission before you can access your funds as your tax affairs will be in order and you will be tax compliant.
6. No red flag on your tax profile
Submitting your tax returns every single year without any gaps in between will make your tax profile look good. SARS is not going to suspect you of trying to hide something from them, something that could place a red flag on your tax profile and which could lead to you being a favourite for verification and audits.
7. Government needs the money
This will probably not appeal to you given this country’s history of state capture and abuse of state funds. But, the truth is government and our economy needs the money. I will leave you here with something
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