South Africa: Paperless Tax Procedures

In early 2007, the South African Revenue Service (SARS) embarked on an ambitious programme to maximize tax payer compliance through the use of ICT. The greatest improvements have been obtained so far in the individual income tax return process where a complex, paper-based, labour intensive process was simplified and automated through an electronic format.

The 2008/2009 Employers Tax season has been a huge success with the receipt of more than 250 000 submissions representing 15.5 million employee tax certificates, up from 11.7 million in 2007. More than 90 per cent of submissions were received electronically using a new electronic channel, branded e@ syFile. Employees no longer needed to complete blank tax returns. For the first time no blank tax forms were dispatched to tax payers, which saved SARS considerable printing and postal charges. The SARS electronic internet platform (e-Filing) is growing rapidly with more than 2 million tax payers registered by 2009. This e-Filing system has shown the greatest gains. The number of returns submitted electronically by the deadline has increased from 580 852 in 2007 to 1 376 702 in 2008, an increase of 137 per cent.

One of the key challenges faced in 2008 was the accuracy of personal information on employee tax certificates, which affected the ability of SARS to match certificates and tax payers. Some tax payers requesting returns electronically also faced uncertainty of which fields to fill in, indicating that further enhancements and education were still required. The next wave of modernisation will focus on other forms of income tax, such as Corporate Income Tax, and modernizing customs.

Under the auspices of the India-Brazil-South Africa (IBSA) Dialogue Forum, the three heads of Revenue Administration have agreed to share information on tax and customs matters, especially abusive tax avoidance and on common positions for trade facilitation, which is soon to go paperless in a large number of economies.