I have constantly been informed of how quickly SARS processes individuals tax returns, and in fairness, it is usually done within a minute or two. Unfortunately, there seems to be a discrepancy between the speed of the processing of your IT34 and the refund being paid to your account. I realise that owing to different banks and processing verifications it will take between 3-5 days to receive your refund into your account. The above turnaround times are exceptional in my opinion, and I hope that all of our governmental agencies work with the same rigour and efficiencies. Unfortunately, these instances are not the ones that have caused many taxpayers to be a little hot under the collar.
Many taxpayers have come to expect the normal 48hour turn around when processing the refund. This has not been the case, and many taxpayers have to wait an undefined period for the refund. Maybe it could be administrations inefficiencies? This does not seem to be the case as the Finance Minister Pravin Gordhan (previously head of SARS) has grilled SARS on the differences between the timing of its payouts whether it be income tax or VAT refunds. The question we have to ask is whether SARS have been “holding back” the refunds and if so how have are they doing it?
SARS rebutted saying that the delays were not intentional but rather owing to operational issues, such as not having enough employees to process refunds (which apparently was contradicted by another SARS employee).
Apart from the ‘operational issues’ it seems SARS has amended its automated audit review on individuals, known as “stopper notification” which sends an individual into the audit. The refund will only be processed upon completion of the audit, which can take several months. It seems that the ‘stopper notifications’ were previously triggered for individuals with refunds larger than R1 000 000 and it seems to have been amended to R500 000. This excludes all those sent for review, which is a quicker process but can still take a few weeks.
Memela mentioned that only 11% or 600 000 taxpayers are affected by the review/audit by SARS. Unfortunately, these changes have caused a significant increase in how many individuals are under review/audit. The increase causes the SARS audit/review department to be loaded and unable to deal with the volume. It would seem that owing to the pressure from decreased tax revenue; SARS is trying to slow down the payments through a systematic change in audit/review rules, which has caused the operational issues.
It is understandable that SARS makes every effort to prevent fraudulent refunds, but this must be based on the fundamental principle of fairness. In this case, it is not that SARS has implemented fraud procedures which are causing the delays, rather a self-motivated change in the system has caused the delays. It can be noted that the relevant tax bodies have raised their concerns with the SARS commissioner and finance minister.
What can you do to ensure the quickest turn-around time?
Unfortunately, there are no quick fixes for the individual taxpayer. The only way to lessen the pain of the process is to submit the relevant documentation when requested for both review/audit and to make sure that if not processed within the given timetables, the issues are escalated. In the case of a full audit, SARS can take 60 days to respond, while a review can be escalated after 21 days of submitting the supporting documentation.
If you require any assistance, please don’t hesitate to contact us directly on firstname.lastname@example.org or 021 761 3489.