Rabia Mayet | rabiamayet@radioislam.co.za

28 August 2024

4-minute read

According to a popular saying, there are only two things in life that are certain: death and taxes; and while we have been taught how to prepare for death, the majority of us are clueless when it comes to preparing our taxes. Tax season is open and the word ‘taxes’ often evokes a feeling of dread within us. The costings, inconveniences and just the general idea of crunching facts and figures is a daunting task, but according to Shamima Chohan, an accountant and tax practitioner, not an insurmountable one. She unpacks everything tax related.

Tax is paid on a monthly basis and if you are running a business, earning an income, or have certain things you want to claim back from SARS, it is necessary to understand fundamentals like how to submit your tax returns, what you need to show, what you need not show, and what SARS allows you to claim back. SARS will only contact you via SMS with your name and your tax number, very rarely an email, and never a link, which is fraudulent and not legitimate. You can then log into your SARS e-filing to find out what they are referring to. It is important to understand taxes because SARS receives a submission directly from your company, and if you’re an individual earning an income, SARS does have access to your bank account.

Many people run small businesses without discipline in terms of having admin in place. You may not want to do it, but having records in order allows you to keep things in place and also assists your account or bookkeeper when submitting your books. Types of documents you should be keeping track of include your monthly expenses, bank statements, suppliers, invoices, purchases of assets and even emails. Be aware of your income and expenses, evaluate these and check and update these details regularly – this will also help you to evaluate how you are doing as a small business, where you can invest, marketing considerations, and how you can grow and progress.  Your taxable income would have to be above R90 000 per annum for small businesses.

There are ways of structuring your tax so that it becomes more efficient for you. Refunds are not guaranteed but can only be done if you submit your returns. The process is clear – your employee works out your deductions and submits it to SARS. Instead of doing your own taxes, using a tax practitioner simplifies this process – they will take into consideration all the relevant information that you need to submit. The amount you claim is relative to your income. There are a number of pitfalls when submitting for different sized businesses; the main problem being the issue of disclosure – there are certain things you must disclose to your accountant; for example, buying or selling a house or a property and selling shares. Shamima suggests being transparent with your accountant so that you don’t get into a sticky situation with SARS.

It is possible to get a refund for medical aids, and medical expenses that come out of your own pocket that are not covered by medical aid.  Insofar as medical disability benefits are concerned, additional rebate amounts that you can claim include school fees for special-needs children, caregivers, learning aids, disability aids, and even medication.

If you haven’t filed for returns for years, there are corrective measures that can be put in place. The repercussions of this can be the inconvenience of locating the relevant documents, the costs of securing items, and the interest and penalties that will be issued by SARS. Finally, a point to note is that last-minute and late submissions can incur additional costs, interests, and penalties.

Shamima says that a key point to remember is that ‘Taxes will always be there – make sure its sorted’. She suggests speaking to an expert about your taxes it in order to gain some knowledge on claims, how to submit your taxes, and refunds and rebates. Remember that your intention in terms of paying taxes is that you have to follow the law of the country and fulfil your responsibility as a business owner or an individual with an income.

Listen to the full discussion on the New Horizons program.