SARS no longer accepts manually filed administrative disputes

The eFiling system has been updated for employers to request remission or object and appeal against penalties.

According to a note issued to employers recently, the South African Revenue Service has enabled its current dispute process on eFiling to allow employers to request a remission, or object and appeal against administrative penalties on late or non-submission of EMP501 (the report of all staff earnings that SARS requires) Employer Reconciliation Declarations.

Employers previously used the manual ADR1 (Alternative Dispute Resolution) for objections and ADR2 for appeals as the electronic dispute process was not available on eFiling for these disputes.

SARS has now also imposed the administrative penalty for late or non-submission of the EMP 501 returns for 2021/2022 which were due by 31 May 2021.

The penalty will be one percent for each month that the EMP 501 return is outstanding up to 10 percent of the total amount of employees’ tax for that reconciliation period (i.e., for that year of assessment).

“We believe this is a positive step that will assist employers and SARS to manage their dispute process more efficiently,” says Joon Chong, partner at Webber Wentzel.

“We note, however, that the dispute process for employment tax incentive (ETI) adjustments is not always available on eFiling. Many employers have been subject to rigorous audits by SARS on their ETI claimed,” says Joon.

According to Joon, employers have, in certain circumstances, had to submit their ETI objections and appeals for every period which has an additional assessment at a SARS branch.

“We hope that the electronic dispute process for ETI will soon also consistently be available on eFiling for all employers for their ETI disputes,” she says.