The following is news flash 2024/02 published by the PAGSA on January 29, 2024 regarding SARS and UIF: Data Collaboration.

EMPLOYMENT DATA SHARING DISCUSSIONS BETWEEN SARS AND UIF

The PAGSA takes note of the Media Statement issued by the Democratic Alliance on 25 January 2024, the preamble of which states as follows:
“The Democratic Alliance (DA) commends the Ministry of Employment and Labour’s decision, for following our sound advice, to draw up a joint implementation agreement on the sharing of employment data between the South African Revenue Service (SARS) and the Unemployment Insurance Fund (UIF).”

The PAGSA has for many years proposed a collaboration of this nature and is fully in support of this project.

According to the media statement, 98% of monthly UIF contributions are paid to SARS by employers via their payroll systems.

Employers and payroll systems also provide SARS with detailed employer and employee data that is reported on the biannual tax certificates. It is now in the public domain that employers and payroll systems will in future (at this stage from 1 March 2026) submit tax certificates to SARS monthly.

Monthly tax certificate information will enable SARS to extract employer and employee data and share it monthly with the Unemployment Insurance Fund. Employer administration will be reduced by submitting employee data only once per month to SARS, and this will also assist the Fund to improve its “overall efficiency and performance”.

The benefits to all parties are obvious.

At this early stage, our hope is that the SARS/UIF collaboration project is extended to include the Compensation Fund.

The groundwork for this has already been done some years back in a presentation by the PAGSA to the Compensation Fund authorities that outlined the benefits of replacing the poorly understood concept of ‘COID earnings’ by the Fourth Schedule definition of remuneration.

The Department of Employment and Labour has taken our proposal forward in the COID Amendment Act that replaces ‘earnings’ in the COID Act with the Fourth Schedule definition of remuneration, with some exclusions.

We are waiting for an effective date to be published in a Gazette to put the COID Amendment Act into operation.

The PAGSA supports these projects and will assist wherever possible to make them a success.