Topical Issues

Tax Return Filing Season for Individuals – 2019

Annual income tax return filing deadlines for the tax year ended 28 February 2019:

As a reminder, the annual income tax return filing deadlines for the tax year ended 28 February 2019 are as follows:

  • 4 December 2019 – final deadline for the submission of 2019 annual income tax returns to the South African Revenue Service (“SARS”) for non-provisional taxpayers via the SARS eFiling platform; and
  • 31 January 2020 – Provisional taxpayers’ 2019 annual income tax return filing deadline via SARS eFiling.

A BRIEF LOOK AHEAD TO THE NATIONAL BUDGET – FEBRUARY 2020

Potential tax changes to be made in the February 2020 annual budget by the Minister of Finance:

The Medium-Term Budget Policy statement (“MTBPS”), which was delivered by Finance Minister Tito Mboweni on Wednesday, 30 October 2019 made for grim reading and somewhat predictably was met with despair in some quarters. Without wishing to belabor the topic, South Africa is in a very difficult place at the moment and the next few years promise to be very challenging, both economically and politically.

What does this mean for you from a tax perspective? The government’s budget deficit is worsening rapidly and the fiscal position will make it very difficult for government to sustain its expenditure programme and to meet the financial needs of a bloated government staff complement into the future. The deteriorating public finances will require tough decisions to be made by government but it seems to be ideologically opposed to making the necessary tough calls, particularly when it comes to its state-owned entities such as Eskom. What this means is that because the government will not be able to significantly reduce its operating expenditure, it will have to raise its revenue to meet its spending plans and to try to limit the escalating national debt as a proportion of GDP. In all likelihood this means tax increases for you in 2020, with the changes to be communicated to all stakeholders in the February 2020 budget presentation.

Whilst the MTBS did not contain any tax proposals, as is traditional, it did create the framework for a discussion between now and February 2020 regarding what needs to be done by government to improve the prevailing economic environment in the country. Whilst various initiatives have already been implemented and many more mooted, President Cyril Ramaphosa’s government has not been able to stem the tide of appalling economic news, with the latest indicator of how difficult the economic situation in South Africa is being National Treasury’s revised downward adjustment of the forecast 2019 GDP growth figure from a figure of 1.5% in February 2019 to 0.5% in the MTBPS. Clearly this is not good news as the tough economic environment is negatively impacting on corporate profits and hence the tax revenue that SARS is receiving from this sector is significantly below budget for the fiscal year to date and it is difficult to predict an improvement in this situation for the foreseeable future.

Whilst Commissioner Edward Kieswetter is making some important changes at SARS, the deterioration of this entity’s operating effectiveness in recent years has taken a heavy toll on its ability to collect tax revenues and this is evidenced by the forecast shortfall of R53 billion in the expected tax revenue figure for the tax year ending 28 February 2020. Inevitably, this places greater pressure on government to increase its revenue through other means, which is where you come in – increases in the existing income tax and capital gains tax regimes, not to forget the traditional “sin” taxes, are all likely to be considered by the Minister and much can be expected in this regard in February 2020.

For any tax advice or guidance, please feel free to contact me by telephone on (011) 516 9803 and / or (073) 229 8974, or by email at graeme@jnsfinancialservices.co.za.