The following is th News flash 2023/31 published by the PAGSA on August 22, 2023 regarding the COID Maximum Earnings calculation: Confidentiality relaxation.

MAXIMUM EARNINGS CALCULATION – RELAXATION OF CONFIDENTIALITY

In the footer of PAGSA Newsflashes, it states that the newsflashes are firstly copyrighted in favour of the PAGSA, and secondly are confidential to PAGSA members and the statutory bodies that the PAGSA partner with.

These bodies include, but are not limited to, the Employment Equity Directorate, the Unemployment Insurance Fund, the Compensation Fund, and SARS.

This was done for good reason many years ago.

Besides proposing changes to the law and commenting on the draft amendments to the law as they unfold, one of the PAGSA’s primary functions is to communicate to PAGSA members any changes to payroll-related legislation or regulations that require returns to be made or taxes to be withheld, as well as interpretations and opinions on the law by the statutory bodies, and the administration requirements that payrolls must comply with.

New or changed requirements are issued in PAGSA Newsflashes as soon as the information is finalised.

Due to the importance of the information published in PAGSA Newsflash 2023-28 ‘COID Maximum Earnings Calculation’ and after requests received from some PAGSA members, we have decided to relax the confidentiality requirement for
this newsflash only.

This means that you can issue PAGSA Newsflash 2023-28 directly to your clients should you so wish, resulting in a consistent message being issued to employers.
However we ask that should you do so, that you firstly acknowledge the PAGSA as the author of the document, and secondly that you request your clients to not distribute the information beyond their business.

The following is the News flash 2023/32 published by the PAGSA on August 25, 2023 regarding the Employement equity reporting period for 2023.

CONFIRMATION OF EMPLOYMENT EQUITY REPORTING PERIOD FOR 2023

The following notice confirms that the Employment Equity Amendment Act that was promulgated in April 2023 and that introduces sectoral demographic targets, will not be made effective before 1 September 2023.

Dear Employer

Reminder: Notice to all Employers regarding the 2023 EE reporting period

This serves to inform you that the EE Amendment Act, No. 4 of 2022 has not yet become effective. As a result of the pending commencement date of the EE amendment Act. No. 4 of 2022. all designated employers, including small employers (those with 1-49 employees) that are designated as per Schedule 4 of the Employment Equity Act, 1998 (EEA) must submit their 2023 EE Reports (EEA2 and EEA4 forms) using the current EEA.

Please note that the 2023 EE reporting period will open on 1 September 2023 for both manual and online submissions. The closing date for manual EE submission is 2 October 2023 and for the online EE submission is 15 January 2024 (midnight).

Kindly note that the annual reminder letters that contain the activation link will be circulated to all employers (by the department of labour) before 1 September 2023 to enable employers to activate their 2023 EE Reporting accounts.

Failure to submit your 2023 EE report by 15 January 2024 (midnight) will subject your organization to the enforcement process prescribed by the EEA. Your organization will also be omitted from the Employment Equity Public Register for 2023 reporting period that will be published by the Minister of Employment and Labour in terms of section 41 of the Act.

We look forward to your continued co-operation in fulfilling the requirements of the Employment Equity Act.

Yours sincerely

Ntsoaki Mamashela
DIRECTOR: EE-LABOUR POLICY AND INDUSTRIAL RELATIONS

The following is the News flash 2023/33 published by the PAGSA on August 31, 2023 regarding the SARS notice: Tax Directives implementation.

SARS NOTICE: EXTERNAL DEBT COLLECTORS – HANDOVER

SARS has issued a notice with regards to the implementation of the enhancements to the Tax Directive system.

The anticipated changes have been listed and explained in the SARS notice.

SARS NOTICE

Dear Fund Administrator / Insurer

SARS TAX DIRECTIVES IMPLEMENTATION

The South African Revenue Service (SARS) will be implementing enhancements to the Tax Directives system during September 2023.

Please familiarise yourself with the following anticipated changes:
Paragraph (b)(xii)(bb) of the definition of “retirement annuity fund” in section 1(1):
A member with more than one contract / policy in a retirement annuity fund can transfer one or more of these contracts / policies to another approved retirement annuity fund, subject to certain conditions. When transferring a contract / policy, the Fund Administrator must ensure that the value of the individual contract / policy in the retirement annuity fund being transferred to another retirement annuity fund is R371 250 and above, and that if an amount remains in the fund, the
remaining value in the retirement annuity fund after the transfer, is at least R371 250. If the member’s total interest (all contracts / policies combined) in the retirement annuity fund is being transferred to one other retirement annuity fund, the monetary restriction on the value per transferring contract or policy is not applicable, and the member’s total interest can be transferred from one retirement annuity fund to another. Please note that this change is only applicable to transfers prior to retirement that take place from one retirement annuity fund to another retirement annuity fund.

Deemed retirement from a Provident Fund Par4(3) of the 2nd Schedule:
Fund administrators must note that the reason “Provident Fund deemed retirement” cannot be used if the date of accrual is on or after 1 March 2023.

Paragraph 2(1)(c) of the Second Schedule:
A retirement benefit, in respect of a member who has reached retirement age, that was transferred to a Preservation Fund, cannot be accessed as a once-off withdrawal benefit, prior to retirement.

Recognition of Transfer
To assist the Fund Administrators / Long-Term Insurers to understand the Recognition of Transfer (ROT) decline reasons, SARS has enhanced the response messages to be more meaningful to ensure that the recipients understand what needs to be corrected before attempting to resubmit the ROT.

Fund administrators / Long-term Insurers are reminded that when a retirement benefit is successfully transferred or there was a purchase of annuity on retirement, the receiving fund / Long-term Insurer must, submit a ROT to SARS. This is to confirm that the member’s benefit, as indicated on the tax directive, was received.

SARS sends a notification to the receiving fund if the ROT has not been submitted to SARS after 21 working days. Where an ROT remains outstanding after 21 working days, the taxpayer will receive a notification. Should the ROT not be received from either the fund or the taxpayer after 21 working days may result in the taxpayer’s return being rejected and the transfer / POA will be treated as a withdrawal benefit and will be subject to tax as such.

Sincerely,

ISSUED ON BEHALF OF THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE
SERVICE

August 2023

The following is th News flash 2023/34 published by the PAGSA on September 6, 2023 regarding the SARS: Employer Filing Season – Interim period ending 31 August 2023.

EMPLOYER FILING SEASON: INTERIM PERIOD ENDING AUGUST 2023

SARS has issued a notice in respect of the 2023 Employer Interim Filing Season.

According to this notice, the filing season will commence on 18 September 2023 and ends on 31 October 2023. This includes all your reconciliation related documents (EMP501 and Tax certificates) for the period 1 March 2023 to 31 August 2023.

Please ensure that your Annual Reconciliation is submitted on or before 31 October 2023.

SARS NOTICE FOLLOWS BELOW:

Dear stakeholder

EMPLOYER INTERIM DECLARATIONS (EMP501): 18 SEPTEMBER TO 31 OCTOBER 2023

The South African Revenue Service’s (SARS) higher purpose is to enable the government to build a capable state to serve the wellbeing of all South African citizens. Thus, we remain committed to improving our service offering to provide clarity and certainty to make it easier for you to meet your tax obligations.

Tax compliance by all businesses, and employers – whether small, medium, or large makes a major contribution to economic growth and development of our country.

For this reason, we urge all employers to prepare for the Employer Interim Reconciliation period.

Employer’s Interim Reconciliation is part of the Filing Season

This year (2024 Tax year), the Employer Interim Reconciliation for Employers filing season starts on 18 September 2023 – 31 October 2023. During this period, all employers in both private and public enterprises must reconcile their Monthly Employer Declarations (EMP201). These reconciliations are based on the Monthly Employer Declarations (EMP201) submitted with the tax values of the interim IRP5/IT3(a)s certificates generated, accurate payroll information and employees’ tax (PAYE) payments made during the period 1 March 2023 – 31 August 2023.

Thereafter, employers can submit an Employer’s Reconciliation Declaration (EMP501) to SARS.

Obligatory Tax Compliance

To ensure that your Tax Compliance Status (TCS) is up to date, employers who have outstanding payments, monthly declarations from prior years (EMP201) and annual reconciliations (EMP501) must submit and make all payments due. Failing which, your TCS will reflect as non-compliant.

Completing your reconciliation is now easier.

Please note the important information below to help you complete your EMP501:
• Employers, tax practitioners and payroll administrators need to download the latest e@syFile™ Employer version. This can be done via SARS eFiling at www.sarsefiling.co.za.
• Import the electronic Employee Tax Certificates [IRP5/IT3(a)s] CSV files from your current payroll system.
• Capture all additional manual IRP5/IT3(a)s, and e@syFile™ Employer will use the information from all the tax certificates to automatically calculate the certificate totals for your EMP501.
• Enter your monthly liabilities, payments and Employment Tax Incentive (ETI) information, if applicable, and e@syFile™ Employer will calculate the rest.

Submission channels

• Employers with 1 – 50 employees can use either SARS eFiling or SARS e@syFile™ Employer. If the employer has less than 50 IRP5/IT3(a) certificates, a tax certificate file can be generated from the payroll system and this file can be imported into SARS eFiling.
• Employers that file EMP501s for more than 50 employees must use the e@syFile™ Employer.
• An exception is made for employers with a maximum of five (5) IRP5/IT3(a)s. The employer can still go into a nearest branch where an agent will help them capture these IRP5/IT3(a)s and the EMP501. Remember to book an appointment before visiting a SARS Branch.

Enhancements to e@syFile™ Employer

Maintenance and general enhancements, such as software version upgrades, will be made.

Accuracy and timely filing are critical.

It is very important for employers to capture the correct PAYE liability on the monthly EMP201 returns. The incorrect calculation of the monthly PAYE liability will result in the imposition of both penalties and interest.

This includes corrections made on the EMP501 reconciliation as any shortfall is attributed to the last month of the reconciliation period.

Please submit your accurate reconciliation before the 31 October 2023 to avoid penalties and interest.

Consequences of non-compliance

If an employer submits the EMP501 late, administrative penalties will be charged. The penalty will equal 1% of the year’s PAYE liability, which will increase each month by 1% up to 10% of the year’s PAYE liability. Furthermore, an employer who wilfully or negligently fails to submit an EMP201 or EMP501 return to SARS is guilty of an offence and is liable, upon conviction, to a fine or imprisonment for a period of up to two years.

What constitutes a criminal offence?

An employer is guilty of an offence and will be subjected to a fine or imprisonment for a period of up to two years where they amongst other offences, fails to:
• Deduct employees’ tax from remuneration or pay tax to SARS within the prescribed period.
• Deliver IRP5 and/or IT3(a) to employees or former employees within the prescribed periods.
• Use employees’ tax deducted or withhold for purposes other than the payment of such amount to SARS.
• Apply for registration as an employer.

Status of submission

Employers must always check the status of submissions to ensure their EMP501 was correctly filed at SARS.

More information
For information on the completion of manual certificates, please go to e@syFile™ Employer User Guide or access the Step-by-Step Guide to the Employer Reconciliation Process under Businesses and Employers page on the SARS website at www.sars.gov.za.

Sincerely,

THE SOUTH AFRICAN REVENUE SERVICE

4 September 2023

The following is the News flash 2023/35 published by the PAGSA on September 9, 2023 regarding the SARS Notice: VAT modernisation Discussion paper.

SARS NOTICE: VAT MODERNISATION DISCUSSION PAPER

SARS has published a Discussion Paper on VAT Modernisation. The intention of the publication is to invite vendors to submit contributions and comments before 31 October 2023.

The published document can be accessed via the following link:

https://www.sars.gov.za/discussion-paper-on-value-added-tax-modernisation/

SARS NOTICE FOLLOWS BELOW:

Dear Valued Stakeholders

SARS has published a Discussion Paper on VAT Modernisation. This is in pursuit of its strategic objective of modernising its systems to provide digital and streamlined online services and making it easy for taxpayers to comply with their obligations.

This discussion paper sets out the high-level vision for the modernisation of the South African Value-Added Tax (VAT) administrative framework.

The intention of publishing the discussion paper is to invite businesses (vendors), accounting system software developers or suppliers, technology entities, recognised controlling bodies, public finance entities, municipal finance entities and the public to submit contributions, and comments, as part of a consultative process to modernise the VAT administrative framework.

Comments may be submitted by close of business on 31 October 2023 to [email protected]

Linking from the SARS website homepage – https://www.sars.gov.za/:

Publication of VAT Modernisation Discussion Paper

The following is the News flash 2023/36 published by the PAGSA onSeptember 21, 2023 regarding the EMP501 error: August financial fields not populated.

EMP501 ERROR: AUGUST FINANCIAL PARTICULARS NOT POPULATED

A random error is experienced by some users when they chose the option “ACCEPT SARS VALUES” when requesting the EMP501 reconciliation declaration on e@syFile.

The Financial particulars for the August period is not populated in the relevant fields on the EMP501.

SARS has confirmed that this is not an error that are experienced by all, but are only randomly for some employers.

SARS is currently busy investigating the error.

Should you experience this error, please send me ([email protected]) the relevant PAYE reference number to enable SARS to update the account in order for the figures to be populated on the EMP501.

Pend the EMP501 for 2 days after which you have to “REFRESH” the data. The information should then be populated in the August fields.

The following is News flash 2023/37 published by the PAGSA on September 29, 2023 regarding the Update on EMP501 error: August financial fields not populated.

UPDATE ON EMP501 ERROR: AUGUST FINANCIAL PARTICULARS NOT POPULATED

A random error is experienced by some users when they chose the option “ACCEPT SARS VALUES” when requesting the EMP501 reconciliation declaration on e@syFile.

The Financial particulars for the August period are not populated in the relevant fields on the EMP501.

SARS has confirmed that this is not an error that are experienced by all, but are only randomly for some employers.

SARS is currently busy investigating the error.

Due to the number of queries referred to SARS with regards to this error, SARS has confirmed that they have fixed this error which will be implemented during the course of the 2nd of October 2023 to the 6th of October 2023. In this case, please refresh the EMP501 return after 8 October 2023 and if the problem still exists, please notify us to inform SARS.

Alternatively, you may manually capture the values as submitted on your EMP201 returns by using the option “OWN VALUES”. The payment will affect the calculation on the EMP501 and the due by / due to you field, however it has no impact on how the reconciliation will process or on the account. Where ETI was calculated and/or utilised and it is not prepopulated, please wait for the fix to be implemented before submitting.

The following is News Flash 2023/38 published by the PAGSA on October 19, 2023 regarding the e@syFile version 7.4.1 Release.

The following is the content publihed by SARS and the release notice published by SARS on e@syFile version 7.4.1

EASYFILE VERSION 7.4.1 RELEASED

SARS has released an update on the e@syFile software (e@syFile version 7.4.1).

The release notes regarding this update of e@syFile version 7.4.1 are as follow:

– Align validation for source codes 3220 & 3195 with SARS PAYE BRS
– Align validation for source codes 4474 & 4493 with SARS PAYE BRS
– New SARS PDF Template for PAYE Statement Of Account (EMPSA)
– Change in functionality to lock the certificate number field for editing/changing after an IRP5/lT3(a) was submitted to SARS
– Adjustment to validation to block certificate numbers with the “08” indicator for Period of Reconciliation for Full Tax Year (“02”) Periods of Reconciliation (aligned with SARS PAYE BRS)
– Enhancement to Synchronisation process for AA88’s and Third Party Transaction and Monetary Information screen in e@syFile to correct the “In Sync/Out of Sync” indicator.

You are advised to back-up your database before installing this latest update.

The following is a news flash published by the PAGSA on October 19, 2023
regarding the SARS Notice: Introducing the new eFiling landing page.

SARS NOTICE: INTRODUCING THE NEW EFILING LANDING PAGE

SARS has made enhancement to the eFiling system by introducing a new eFiling landing page.

INTRODUCING THE NEW eFlLING LANDING PAGE

We are excited to introduce the new eFiling landing page, that will go live on 27 October 2023. This eFiling website enhancement contributes to SARS’ strategic objective of modernising our systems and providing digital and streamlined online services. To give taxpayers a seamless experience, whether browsing the website or tapping into the SARS MobApp, the new eFiling landing page has a similar look and feel to the SARS MobiApp.

The new eFiling landing page will consist of these four (4) specific sections:

1. Static top banner, which is the top section of the page that contains access links to the eFiling website.
2. Quick Links section to allow the user to click on features to access specific eFiling services quickly without having to navigate through the menu bar.
3. Scrolling banners to direct the user to the website for further assistance and guidance about eFiling.
4. The static text section will provide the user with more information about the purpose of the site.

It is important to note that certain online system queries and advice requests can be accessed without the user being required to log in, while accessing the eFiIer profile will prompt the user to follow the login process to ensure security when requesting specific services, i.e., File My ITR12 Return, Notice of Registration, Tax Compliance Status, and more.

Please be advised that the eFiling website address remains unchanged, and the user can opt to navigate to the new landing page via the below links:

Option 1: Through the SARS website at www.sars.gov.za
Option 2: Log on directly to eFiling at www.sarsefiling.co.za

We urge you to use eFiling or download the SARS MobiApp. It is a safe online platform that offers quick, convenient services to help taxpayers, traders, and tax practitioners with their tax matters.

SARS, At your service.

THE SOUTH AFRICAN REVENUE SERVICE

October 2023
SARS NOTICE:

The following is a news flash published by the PAGSA on October 31, 2023 regarding the Two-pot Retirement System Postponement.

POSTPONEMENT OF THE EFFECTIVE DATE OF THE TWO-POT RETIREMENT SYSTEM

The Standing Committee on Finance has confirmed the proposal to change the Two-pot Retirement System draft legislation to:
1. Postpone the effective date from 1 March 2024 to 1 March 2025
2. Increase the seed capital amount to the lesser of ten per cent of the “vested component” and R30 000.

While the official documentation lists these as ‘proposed’ changes, there seems to be no doubt that the final Revenue Laws Amendment Bill that will be introduced shortly in the National Assembly for approval will reflect these proposed changes. However, keep in mind that at the time of writing this newsflash, the final legislation has not yet been issued, and that parliament must give their approval before there is certainty.

The postponement to the effective date was made at the request of the retirement fund industry to give them more time to make the necessary changes to their systems, to train their staff, and to educate the members of the funds.

The increase to the seed capital amount was requested by various labour organisations to reduce the current hardship of many members of the retirement funds.

There are other changes to the Two-pot retirement system that are likely to be introduced in the coming year.

Note that the postponement of the effective date to 1 March 2025 means that as matters stand, the SARS Vision 2024 Monthly tax certificate project and the Two-pot Retirement System will both ‘go live’ on 1 March 2025.