What is Self-Assessment?
This is a simple mechanism by which taxpayers assess themselves for income that has accrued, been received or made in favor of a taxpayer, in any year of assessment. It is not a new tax, but just a system whereby the taxpayer is given the responsibility to compute his/her own tax liability.
How is it different from the traditional assessment?
This mechanism provides for a taxpayer to make an own assessment and submit same to the SRA. The submitted income tax return is then deemed to be an assessment by the Commissioner General; any taxable income so declared by the taxpayer and any tax payable being the respective amounts shown in the return that is submitted by the taxpayer.
The traditional method of assessment requires a taxpayer to submit returns after which it is the SRA that assesses and issues a notice of assessment that informs the taxpayer of the final/actual tax liability.
Who is required to self-assess?
This system will be rolled out in phases, starting with large taxpayers; once fully implemented all taxpayers including companies, individuals, trust, etc. will be required to self-assess. Taxpayers who are required to self-assess will be determined by gazette and the SRA will make all possible means to inform them prior to the end of any year of assessment. click here for the list of taxpayers currently required to self-assess for the tax year ending June 2013.
What are the implications of Self-Assessment?
- Taxpayers are given the role of assessing themselves;
- It creates certainty to taxpayers as the determination of tax liability is not dependent on the tax administration’s judgment;
- Keeping of business records will continue to be a compliance requirement.
What are the advantages of self-assessment?
- The complicated processes leading to the payment of tax after the submission of returns are significantly reduced;
- The taxpayer is directly involved in the tax computation which will lead to better financial planning;
- The costs of compliance in respect of submission of income tax returns will be significantly reduced;
- Taxpayers will have an elevated understanding and appreciation of tax computations;
- Quality control of taxpayers’ tax affairs will significantly improve as they ensure that their assessments are up to date as well as reflect the true tax position.
What are the SRA’s responsibilities towards supporting self- assessment?
- Tax audits and investigations;
- Issuance of pre-transaction rulings;
- Intensive taxpayer education.
Your tax obligations
1. To be honest when computing your tax liability
Penalties will be charged for fraudulent declarations.
2. Payment of Provisional Tax
First payment : This payment must be made within six months from the commencement of the year of assessment (July each year) or approved financial year-end date.
Second payment : This payment must be made not later than the last day of the year of assessment or approved financial year end date
Third payment: It must be paid on or before the due date of the tax return.
3. To submit your tax returns on or before the due date
o Your tax return must be sent to the SRA by 31 October after the end of the tax year or 120 days after an approved financial year-end date.
o Penalties will be charged for late submission of tax returns
o Returns will be rejected if final has not been made
o Interest on late payments will be imposed
o If the last day of submitting of returns falls on a public holiday or weekend, the return must be submitted on the last working day prior to the public holiday or weekend.
4. To keep proper records
o Taxpayers must keep full and accurate records of business activity. The records must be sufficient to enable proper return of income; must be kept in Swaziland; be in English or siSwati; and must be kept for at least 5 years.
o Failure to keep proper records or failure to keep them for the necessary five years, is an offence.
NOTE: Section 39 of the Income Tax Order, 1975 provides for the SRA to carry out administrative assessments (i.e. raising estimated assessments) for taxpayers who do not submit income tax returns within the stipulated time and in the manner prescribed.