As in previous years, taxpayers will have the option to file their returns electronically via eFiling or manually at their local SARS branch. SARS Commissioner, Oupa Magashula, recently confirmed that it became a world-leader in the growth of electronic submission of income tax returns with 93% of all submissions received in the 2009-10 tax year having been received electronically. SARS only received around 270,000 manual returns last year.

At the same time, he added, automation and the use of third party data have allowed the use of risk assessment to enhance SARS's ability to detect non-compliance. “Despite the economic downturn during the past year,” he said, "SARS recorded an increase in taxpayers filing their returns on time from 58% in 2008/9 to 79% in 2009/10. This helped SARS to collect almost ZAR8bn (USD1bn) more in revenue than anticipated.”

For this year, SARS has made improvements to its case tracking system, which will enhance its ability to inform and help taxpayers with resolving their queries. Taxpayers will also have a better view of the progress of their returns via eFiling where they can get the same information in real time that SARS employees have access to.

Significant changes to the provisional tax system have been made, including simplifying the provisional returns, which now come pre-populated with taxpayer information and key tax information including the basic amount from the prior year and relevant rebates. Provisional taxpayers only need to complete five fields and the return calculates automatically the provisional amount to be paid.

Following the big success of the introduction of a statement of account for non-provisional taxpayers last year, SARS is extending this facility this year to provisional taxpayers to give them a view of all their recent transactions with SARS and a payment balance.

Magashula gave an insight into SARS’s plans to improve its ability to detect and deter non-compliance. For example, he said, in October this year, SARS will introduce the first bi-annual pay-as you earn (PAYE) submission for employers, in which they will be required to submit a reconciliation for the first six months of PAYE, together with employee tax certificate information for their employees for that period.

As part of this reconciliation process, employers will be required to provide expanded demographic information in respect of all employees including a tax reference number for each employee along with full names, ID numbers and home and work addresses.

This, he disclosed, will double the number of registered taxpayers from approximately 6m currently to around 12m, and will greatly enhance SARS's ability to match employment income to taxpayers as well as to improve its ability to track and trace all those earning employment income and other income.

Furthermore, he announced that SARS has introduced new administrative penalties, beginning with monthly penalties for taxpayers who have outstanding returns for multiple years. In January this year, the first round of penalties was issued to about 230,000 such taxpayers. The first month’s penalties totalled some ZAR130m.

Unfortunately, he continued, the majority of those overdue taxpayers have failed to remedy their non-compliance, and from next month SARS will proceed to notifying employers of an intended action to attach to employees’ salaries.

SARS will, however, apply leniency to those taxpayers who voluntarily come forward to disclose previous non-compliance, which SARS was not yet aware of or investigating. This approach is now being formalized in a voluntary disclosure programme which will be offered from November 1, 2010 to October 31, 2011.

Taxpayers may come forward during this period to disclose their defaults and regularize their tax affairs. Successful applicants will have to pay the full amount of tax due but will not be faced with additional tax, penalties and possible criminal prosecution. In addition, depending on the circumstances of the case, they will not be charged the interest that would otherwise be due.