SARS Tax Directive issued date error
SARS has confirmed that the Employment Tax Validation (ETV) report with the error relating to the issue date of the directive, should be ignored, in cases where the employer has completed the correct directive issued date in the specified fields. The directive issue date should be the date SARS has issued the directive and NOT the accrual of application date. Confirmation by SARS follows below:
From: Karin Smit
Sent: Friday, 27 May 2022 15:32
Subject: Employer Filing Season 2022 – Warning Message
Dear Stakeholders
It has been brought to my attention that in the submission of the EMP501’s in instances where a directive was issued on eFiling and the directive is validated there are examples where, even though the date on IRP5 is the same as the date of the letter of directive, an error message is given which states “Employment Taxes failed validation file: Invalid directive date issued”
SARS advises that this error can be ignored. It should be noted that this impacts a very limited number of submissions. With warm regards
Karin Smit
Stakeholder Relations – Private Sector
Regards,
Rhona van Taak
Admin Manager Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

Summary of the PAGSA Communications issued to Members during 2022
The PAGSA Newsflashes that were issued during 2022 (55 in total) are summarised in this last Newsflash of the year, grouped under the statutory bodies that partner with the PAGSA. This summary can be used by members by searching under each statutory body for a particular topic and then using the the Newsflash number to access the Newsflash that is archived on the PAGSA website. In addition to these newsflashes, at the start of each month during 2022 the PAGSA issued a summary of the employment tax-related notices, regulations and amending legislation issued by the statutory bodies with links to assist the easy retrieval of these documents. These important monthly notices are not included in this summary, but are available on the PAGSA website. As a last word from 2022, be prepared for significant changes to the legislation and the administrative requirents in the coming year. Newsflashes listed per Statutory Body – 2022
National Treasury
PAGSA NF 2022/02 – Date of 2022 Budget Review
Budget Review expected to be presented on Wednesday 23 February 2022. PAGSA NF 2022/03 – Final Tax law changes: General
Discusses the general changes to tax-related legislation that are effective from 1 March 2022. PAGSA NF 2022/05 – SONA: ETI Review
State of the Nation Address on 11 February 2022 indicates changes to the Employment Tax Incentive Act. PAGSA NF 2022/07 – Final Tax law changes: ETI Overview
Overview of the ETI Monthly Remuneration amendment that is effective from 1 March 2022. PAGSA NF 2022/09 – Final Tax changes: Pending clarification
Two complicated amendments that the PAGSA has been discussing with the authorities for some time to get clarity. PAGSA NF 2022/10 – Final Tax changes: Long service awards
SARS opinion on the changes to the taxation rules for qualifying Long Service Awards, and the correct method of reporting this information on tax certificates. PAGSA NF 2022/11 – Increase to the ETI value
The Budget Review of 23 February 2022 announced changes to the ETI calculation formulae that increase the value of the ETI amount by up to 50%, effective from 1 March 2022. PAGSA NF 2022/15 – Final Tax changes: Curbing ETI abuses
Discussion of the details of the amendments to the ETI Act (Employment Tax Incentive Act) to curb ETI abuse that are effective from 1 March 2022. PAGSA NF 2022/16 – Curbing ETI abuses: Confidentiality relaxation
Due to the complexity of the changes to the Employment Tax Incentive Act that seek to curb the abuse of ETI the confidentiality requirement for this newsflash was relaxed to enable distribution to all clients of PAGSA members. PAGSA NF 2022/20 – Tax Relief for KZN Floods
Update on indication of any changes to the legislation to provide tax relief. PAGSA NF 2022/49 – Budget 2023: Comments invited
Comments on personal employment tax legislation invited from PAGSA members for submission to National Treasury and SARS. PAGSA NF 2022/50 –Public holiday: 27 December 2022
Special announcement by the State President. SARS
PAGSA NF 2022/01 – Tax deduction PAYE on Pension or Annuity
In terms of Fourth Schedule paragraph 2(2B) SARS issues a notice that introduces a new method of calculating PAYE for pensioners who receive annuity income and additional remuneration. PAGSA NF 2022/08 – PAYE BRS for 2022-23 issued
After discussions with the PAGSA, version 21.0.0 of the SARS PAYE Business Requirements Specification that provides the rules governing tax certificate layout and data has been issued by SARS. PAGSA NF 2022/12 – Subsistence: Overnight & daily rates
SARS regulation that specifies the 2023 deemed daily subsistence thresholds. PAGSA NF 2022/13 – Rate per kilometer: 2023 Tax year
SARS regulation specifying the 2023 prescribed rate per kilometer and the Cost Scale table. PAGSA NF 2022/17 – Employer Filing Season: Year ending Feb 2022
Employers filing season start and end dates. PAGSA NF 2022/19 – Penalties for late submission of EMP501
The SARS notice clarifies that administrative penalties will be raised on late (i.e.

Budget Review 2023 – Annexure C Proposals to Amend Payroll-related Legislation
The Budget Review was presented on 22 February 2023 and proposed changes to the legislation that impact on payroll suppliers and the payroll offices of employers. The annual legislation amendment cycle for 2023 will follow the usual steps:
1.The Budget proposals (22 February 2023)
2.The issue of draft Bills (usually towards the end of July)
3.Comments on the draft Bills (by the PAGSA and other organisations)
4.Workshop to discuss the comments (with National Treasury and SARS, usually held in August)
5.The ‘draft Bills’ are updated to ‘Bills’
6.SCOF (Standing Committee on Finance) reviews the Bills and creates final Bills (October)
7.The Final Bills go to the National Assembly and the National Council of Provinces for approval (November)
8.The approved final Bills go to the State President for his signature indicating proclamation as Amendment Acts. As can be seen from this yearly cycle, the budget proposals are a reasonably firm early indication of what could be in the law for the next year. It is therefore important for employers and payroll suppliers to take note of them. Refer to PAGSA Newsflash 2023-08 for details of the changes to the tax tables, rates, limits, and thresholds, that are important for payrolls and that are already effective from 1 March 2023. Budget Proposals in Annexure C
The Annexure C proposals for changes to payroll-related legislation are included verbatim below in case you have not seen them, and because the actual wording can help one to understand the intention of the proposed change. There are changes proposed in the budget that affect members of retirement funds, but they do not impact directly on payroll administration and are therefore outside of the scope of this Newsflash. The budget proposals (there are not many of them) that impact on payroll suppliers and employers follow. Budget 2023 Proposal: Clarifying the amount of employer contribution to a retirement fund to be deductible
Section 11F(4) of the act deems an employer contribution to a retirement fund as a contribution made by the employee, and it is calculated as the amount equal to the cash equivalent of the value of the taxable benefit. However, there is no requirement that the calculated cash equivalent be included in the employee’s income, as is the case in sections 6A and 6B of the act. [Rob: Medical Tax credit (s6A) and the Additional Medical Tax Credit (s6B)]
This is against the policy rationale of the act’s provisions. To address this, it is proposed that the act be amended to require that the cash equivalent of the taxable benefit for employer retirement fund contributions be included in an employee’s income before a tax deduction is allowed. PAGSA Comment: Interesting that despite the oversight process, this drafting error still slipped through. Budget 2023 Proposal: Aligning tax registration requirements for non-resident employers
It has been noted that non-resident employers may not have representative employers in South Africa for purposes of employees’ tax. They are, as a result, not liable to deduct or withhold tax from the remuneration that is paid to their employees who render services in South Africa. Nevertheless, given that they pay remuneration, they are required to register with SARS as employers. They are liable for skills development levies and unemployment insurance contributions, which many pay. It is proposed that the various provisions be aligned to ensure consistency. Budget 2023 Proposal: Varying employees’ tax withholding in respect of remuneration
The Fourth Schedule to the Income Tax Act allows employers to request a variation in employees’ tax withholding to take into account foreign taxes paid. However, such a variation does not apply to remuneration arising from share options and similar schemes. This could result in cash flow implications for the affected employees, as they will only be entitled to claim a foreign tax credit when they complete their annual tax returns.

SARS Notice: Enhancements to the Fourth Schedule Par 2(2B) Instructions Process
The following SARS notice brings the Fourth Schedule paragraph 2(2B) process into the enhanced tax directive system. SARS NOTICE
IMPLEMENTATION OF TAX DIRECTIVE SYSTEM ENHANCEMENTS SCHEDULED FOR 9 DECEMBER 2022
The introduction of Par 2(2B) of the Fourth Schedule requires that employees’ tax be calculated and withheld at a fixed tax rate from an annuity, if a taxpayer receives remuneration from more than one source during a year of assessment and where one or more of those sources is from an employer who is a retirement fund or is licensed as an insurer under the Insurance Act. These employers are required to apply the fixed tax rates prescribed and made available on e@syFile™ Employer or eFiling by SARS. The policy intention aims to ensure that the monthly employees’ tax is calculated correctly so that the taxpayer does not have a substantial tax shortfall due by you to SARS or due to you by SARS on assessment. These tax rates are calculated using prevailing tax rates and information pertaining to the taxpayer at the time of processing. 1. Given that such information may change and require a revised tax rate, an enhancement is required to cater for specific individual fixes as and when necessary and provide an indication to the retirement fund or a long-term insurer whether the tax rate results from:
•An initial full run
•A re-run
•A partial run
•A full year. 2. As is currently the process, once the tax rates have been calculated, the cover letter and tax rate file are generated, and made available to the employer on e@syfile™ Employer and eFiling (for employers with 50 or less employees). 3. Enhancements to the user roles on eFiling will be implemented to specify and provide clarity for the various user profiles with respect to the following functionalities:
•View – the user will be able to only view the letter containing the fixed tax rates related to Par 2(2B) of the Fourth Schedule. •Completion – the user will be able to view and download the file and complete application forms. •Submission – the user will be able to view and download the file, complete and submit application forms. 4. The IRP3(s) form has been improved to allow for employer share schemes that are longer than 5 years. The fields to indicate the qualifying periods during which the exemption under section 10(1)(o)(ii) may apply and other relevant fields were increased from 5 to 15 fields. Sincerely,
ISSUED ON BEHALF OF THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
December 2022
Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

Compensation Fund: Earnings Threshold and ROE Submission Period
The Director-General of Employment and Labour issued Government Gazette Number 48065 on 17 February 2023 to announce that the period during which employers must submit the annual Return of Earnings for Actual earnings for 2022/2023, and Provisional earnings for 2023/2024, is 1 April 2023 to 31 May 2023. As a result of a request submitted earlier to the Fund, a second Gazette with the same number (48065) and the same date of issue (17 February 2023) specified the two earnings thresholds as follow:
1.R 529 264 for 1 March 2022 to 28 February 2023
2.R 563 520 for 1 March 2023 to 28 February 2024. I assume that the layout of, and the information required, by the Return of Earnings form is the same as last year (with the exception of the dates and earnings threshold as specified above), but a request to confirm this has been sent to the Fund. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

2023 Budget Review Date
The Budget Review is normally presented on the last Wednesday of February every year. However, in a year when the Budget Review date is very close to 1st March, there is very little time in which payroll suppliers can implement those requirements of the budget that are legally effective from 1st March. When this situation has arisen in the past, we have requested that an exception be made to present the Budget on the second last Wednesday of February, and our request has been acceded to (no doubt with the support of other parties). The latest PARLIAMENTARY PROGRAMME FRAMEWORK FOR 2023 has been issued and confirms that the 2023 Budget Review will be presented on Wednesday 22 February 2023. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

SARS PAYE BRS version 22-0-0 for 2023/24
The latest SARS PAYE BRS version 22-0-0 that specifies the technical requirements that payrolls must comply with when issuing tax certificates was issued by SARS on 24 February 2024 and is available on the SARS website. Version 22-0-0 includes:
1.The changes necessary for the 2022/23 Tax year end tax certificate submissions in April and May 2023 in respect of the 12-month period 1 March 2022 to 28 February 2023, and also
2.The changes necessary for the 2023/24 Interim tax certificate submissions in September and October 2023 in respect of the 6-month period 1 March 2023 to 31 August 2023. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

Documents: PAGSA Information Session (25 June 2019)
Following the Information Session held on 13th June 2022, the following presentation of the information session has been posted on the PAGSA Website. Below please find the he link to the recording:
View file
Please note that these documents are confidential to the PAGSA members. Regards,
Rhona van Taak
Admin Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

SARS new USSD service for Individuals
SARS has announced that they have developed new USSD technology to assist individual taxpayers to become, and to remain, tax compliant. The options available for individual taxpayers using this technology are—
Check their tax numbers
Obtain account balances
Check whether or not a tax return must be submitted
Make an e-Booking to visit a SARS branch. At this early stage, it appears that employees can use this new technology to obtain their income tax reference numbers which will assist employers to report the income tax reference numbers on tax certificates. Below please find the SARS note relating to this announcement. Regards,
Rhona van Taak
Admin Manager Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER. SARS Notice
New USSD Service makes it easier for taxpayers to comply
SARS is excited to introduce a USSD service, as an additional channel for taxpayers to manage their tax matters. This is in line with the strategic objectives to make it easy for taxpayers to comply and fulfill their tax obligations, as well as to modernise our systems to provide digital and streamline services. From 20 March 2023, taxpayers may use the code *134*7277# to interact with us thereafter choosing from one of the four menu options:
To check if they have a tax number
To get their account balance
To check if they need to submit a tax return
To make an e-Booking to visit a branch
We still have a sizable population of taxpayers who do not have access to eFiling, the SARS MobiApp, or own a smart phone, which is the reason for introducing this channel. The service is free for taxpayers to use, and it doesn’t need access to any data. As a member of the SARS community and one of our ambassadors, we urge you to familiarise yourself with the new service and spread the word about it whenever you have tax-related enquiries. With the new channel, taxpayers will have answers quickly in the palm of their hands. USSD stands for Unstructured Supplementary Service Data, this code works similarly to a text message and establishes real-time communication between a cellphone and server. A user with a phone that has limited storage will be able to use this code. This is an interactive channel that taxpayers without smart phone can use to reach for some of our service offerings. We will publish infographics that you can easily download and share in due course.

PAGSA information session
The PAGSA Annual General Meeting (AGM) is to be held on Monday 13 June 2022. After the formalities of the AGM, an information session will start at 10h45 as a virtual meeting (Zoom). The topics which will be covered during this information session are-
a.Fix rate PAYE calculations (Rob Cooper)
b.Keynote address (SARS: Mark Kingon)
Should you wish to attend the information session, please urgently confirm your attendance under reference “Info session 202206” by no later than close of business on the 10th June 2022 via email to [email protected] with the company name, attendee’s surname, first name and email. An email with the link to the meeting will be send to individuals from whom confirmation has been received. Please note, the information that will be presented will be of importance to your payroll part of the business. Regards,
Rhona van Taak
Admin Manager Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER