Why is Your 2018 Tax Refund being Delayed by SARS?

Tax and Accounting

Why is Your 2018 Tax Refund being Delayed by SARS?

The 2018 Tax Season officially opened in South Africa on 1 July 2018, allowing individual and provisional Taxpayers to submit their Tax Returns.

The 2018 Tax Season officially opened in South Africa on 1 July 2018, allowing individual and provisional Taxpayers to submit their Tax Returns. Being over halfway through the tax season, numerous Tax Practitioners have taken to Social Media to talk about a new action that SARS has started to implement, which is referred to as a “Refund Verification”.


During the submission of our own clients’ Tax Returns, we have also noticed the same action being applied by SARS. The action referred to entails SARS finalizing the tax return, issuing an assessment, but before the refund is then paid out to the Taxpayer, a SARS letter will be issued to the Taxpayer requesting additional verification information – allowing SARS an additional 21 business days to verify the information before processing the refund for payment. This action falls outside the normal Return Verification or Audit process, and for many in the Industry, it seems as simply a means of delaying the payment of Tax Refunds.


The Tax Ombud issued a detailed report in this regard during 2017 and the Acting Commissioner again acknowledged the issue at the recent SARS/RCB Leadership meeting.


There seem to be a multitude of reasons for the delays. In some instances, the refund delays are caused by repeated requests for bank verification for the same taxpayer even where banking details have not changed. Regarding this, SARS is relooking at their business rules to ensure that taxpayers are not unnecessarily forced to go to a SARS branch to verify details when nothing has changed.

To check whether your banking details are valid you can do the following:

1. Click on the ‘Home’ tab at the top of your main Efiling screen;

2. Click on the ‘SARS Registered Details’ tab on the left;

3. Click ‘Maintain SARS registered details’ and then click ‘I agree’ and ‘Continue’;

4. On the left hand side of the screen you must click on the tab that says ‘My bank accounts’.

 

When this page opens, you can then see whether your banking details are valid on the SARS system. If they are not you will need to go down to SARS to sort this issue out.


Special stoppers have reared their head again, although in SARS’s view, the term is being used incorrectly. Certain refunds are stopped where risks are identified, and SARS has committed to working on resolving these more efficiently in order to release the refund timeously.


Tax practitioners have noted that their taxpayer clients often receive demands for payments while in the objection phase, the payments are made and then when the dispute is successful, the refunds do not materialize. This is also the case where tax court decisions find in favour of the taxpayer and there is a delay in issuing a revised assessment and paying any refund due.


With respect to this aspect specifically, a process is being put in place whereby the tax court will hand over decisions to the audit department to ensure timeouts issuing of assessments and refunds of amounts due. (Source: Integritax, Aug 2018, pg 8 – 9)


So what can you do if SARS is delaying your refund?

Firstly, ensure that you are compliant with SARS otherwise your refund will not be paid out. If your tax matters are up to date, phone SARS Contact Centre to ask for a reason, if no reason can be supplied, request them to escalate the query (which will take up to 21 business days) and ask for a case number.

If it is not resolved, lodge a Complaint with SARS on eFiling using your latter case number, which will take a further 21 business days.

To do this, follow these steps:

1. Click on the ‘Services’ tab at the top of the main Efiling screen;

2. On the left click on the ‘Complaints’ tab on the left;

3. Click on ‘New Complaint’ and proceed to fill out this form stating that you are lodging a complaint due to your refund not being paid out.

 

If still unresolved, you may submit your complaint to the Office of the Tax Ombud. Please note that you must first exhaust SARS’ internal remedies (such as lodging a complaint and getting no assistance) before approaching the Tax Ombud.



Please refer to the following link of how to lodge a complaint at the tax ombud:

http://www.taxombud.gov.za/Complaints/Pages/default.aspx