The following is the News flash 2023-17 published by the PAGSA on May 17, 2023
regarding the Monthly Tax Certificates – Heads-up.

Vision 2024 PAYE: Monthly Tax Certificate Submissions

Background:
In February 2020, the South African Revenue Service (SARS) announced their intention to modernize their systems using data-driven insights, artificial intelligence, and interconnectivity. This project, known as Vision 2024 PAYE, faced challenges due to the Covid-19 lockdowns, subsequent relief legislation, and civil unrest.

Payroll Administration Investigation:
After the initial setbacks, the Payroll Authors Group of South Africa (PAGSA) investigated various areas of payroll administration and engaged with SARS to understand the practical implications. These discussions emphasized the need for a SARS Business Requirements Specification (BRS) that focused on the proposed modernized requirements.

Budget 2023 Intention: Third-party data and personal income tax administration reform:
The February 2023 Budget Review outlined the intention to reform pay-as-you-earn (PAYE) and personal income tax administration. The reform aimed to reduce administrative burdens for employers, payroll administrators, and individual taxpayers. The reform would involve monthly tax certificate submissions and extend to third-party data providers.

SARS PAYE BRS – Technical Requirements of Monthly Tax Certificate Submissions:
SARS, PAGSA, and other third-party bulk suppliers have been working on creating a Monthly PAYE BRS to inform both SARS systems and payroll systems of the technical requirements for monthly tax certificate creation and submissions. This process is more complex than it may initially seem.

Important Aspects of the Monthly PAYE BRS:
The Monthly PAYE BRS includes additional fields and changes to the file structure and records. Discussions are ongoing regarding submission channels, reporting corrections, and the impact on the EMP201 declaration process. More information will be provided once these discussions are finalized.

Heads-up for Payroll Suppliers:
Payroll systems will need significant changes to accommodate the monthly requirements. Quality assurance and compatibility testing between SARS systems and payroll systems will be a lengthy process. It is advised to allocate sufficient time in development schedules for the new requirements. The rollout dates and more details will be provided by SARS when finalized.

In conclusion, the Vision 2024 PAYE project aims to modernize tax administration in South Africa by implementing monthly tax certificate submissions. This reform will reduce administrative burdens and improve efficiency for employers, payroll administrators, and individual taxpayers. Payroll suppliers should be prepared for significant changes and allocate time for development and testing.