The South African Revenue Services (SARS) is in charge of collecting tax and ensuring tax compliance in the country.
Annually, members of the South African workforce, who are eligible to pay tax, submit their tax returns. Taxpayers can calculate their tax liability, schedule tax payment and request refunds if they believe that they paid too much tax.
Once you do submit an income tax return, SARS may conduct a verification or an audit. These processes are different.
During a verification process, SARS checks if your tax disclosures or claims can be matched with supporting documentation. This supporting documentation is provided by you as the taxpayer. The verification process is to determine if you provided an accurate representation of your financial tax position.
Any taxpayer can be chosen for verification by SARS. If you are selected for verification, SARS will notify you with an official letter. The letter will contain information which you will be required to submit in a particular time frame. If you use the SARS eFiling system, you can use it as a channel to submit your documentation. If you're not happy with the verification assessment made by SARS, you may dispute it.
During an Audit, SARS examines the financial and accounting records as well as supporting documents to determine if the taxpayer correctly declared their tax position to SARS.
Any taxpayer can be for an audit by SARS. You must await formal notification from SARS informing you that you have been selected for an audit. You may be required to submit supporting documents. Photocopying costs can be recovered by the revenue service. If you're not happy with the audit assessment made by SARS, you may dispute it.
