Failure to 'opt out' and submit a return where the auto-assessment is incorrect can have severe consequences for the taxpayer if the auto-assessed amount is lower than the correct tax amount.

Listen to this article 6 min Listen to this article 6 min The South African Revenue Service (SARS) has indicated that for the 2024 personal income tax filing season, starting in July 2024, it will once again make use of automatic assessments (commonly referred to as auto-assessments). SARS will issue these auto-assessments notices from 1 July 2024 to 14 July 2024 for taxpayers whose tax affairs are considered less complicated.

Like the 2023 filing season, if the taxpayer agrees with the auto-assessment, there is nothing the taxpayer would need to do. However, if the taxpayer disagrees with the auto-assessment, they need to "opt out" by submitting a tax return by 21 October 2024. When the auto-assessment indicates a refund due to the taxpayer, the taxpayer can expect the refund within 72 hours after receiving the auto-assessment.

SARS uses third-party generated returns, obtained from, for instance, employers, banks, financial institutions, some state-owned companies and medical aid schemes, to populate the auto-assessment.

Thus, SARS makes an estimation based on information readily available to it. However, as the court indicated in Commissioner for Inland Revenue v Di Ciccio 1985 47 SATC 199, the accuracy of an estimation "will inevitably be less...