Six million taxpayers auto assessed but tax headaches remain

The South African Revenue Service (SARS) aims to auto assess more than six million individual taxpayers during the 2026 Filing Season.

Auto assessments were introduced eight years ago to simplify the process of filing a tax return for taxpayers with uncomplicated financial affairs.

Information from third-party data providers, such as banks, financial institutions, medical schemes and retirement fund administrators, is used to prepopulate tax returns, making it unnecessary for certain taxpayers to file a return.

However, it remains your responsibility as a taxpayer to ensure that the information in your return is accurate.

And there’s the rub, Nikki Kennedy, founder and partner at NK Accounting Services and Akademia lecturer, says.

“There is an expectation from SARS that taxpayers should know when there are errors or omissions where in reality most people simply accept that SARS is correct and either pay what is due or accept that the refund is correct.”

Picking up errors is not easy

Pieter Botha, founder of Fintax and tax specialist, agrees. “I think SARS is naïve to think that people in general can check their tax assessments and make informed decisions about their correctness.”

If there are errors in the third-party information, neither you nor SARS can correct it.

You have to contact the data provider and have them resubmit the correct information to SARS.

There have been instances where information that does not apply to a taxpayer has been prepopulated on their return. Previously it was possible to delete it, but this is no longer an option, Botha says.

“You have to take it up with the entity who submitted the information to SARS. Good luck finding the appropriate person to assist,” he says.

Correcting errors is an administrative burden

Kennedy says finding the right person, having the tax certificate retracted, reissued and submitting an amended return may sound easy but is a huge administrative burden for an ordinary taxpayer.

US courts have found that where third-party information cannot be substantiated or where it is erroneous the burden of correcting it cannot be placed on the taxpayer.

“This is not the case in South Africa. I believe it is necessary to address this burden when things do go wrong. Unfortunately, the amounts involved are not high enough to warrant taking matters to court,” she says.

The legal process is too expensive; hence it remains a “hair-pulling” experience to resolve the issue without making it a legal matter. She says.

Few corrections are made

According to Kennedy only 0.07 percent of the auto assessed taxpayers submitted an amended return so far this year.

Some taxpayers may be losing out on legitimate tax deductions a taxpayer is entitled to such as additional retirement annuity contributions or large medical expenses that are not captured in the auto assessment.

Engela Crocker, tax director at RSM South Africa, says most taxpayers don’t verify their information and they have no defence if it is incorrect.

“They cannot after the fact say, ‘but SARS said …’. It remains their responsibility to ensure that the information is complete and correct.”

Crocker says taxpayers must check the information in the auto assessment against their tax certificates from their employer, medical scheme, the bank and financial institutions (for interest income and dividends) and their retirement fund administrators.

Taxpayers’ carry the responsibility

Botha notes that there are many instances where the employee’s tax certificate (IRP5) is not reflected in the auto assessment. The burden is then on the employee to request the employer to submit the IRP5 to SARS and only then can they submit a revised return.

Taxpayers also get caught out when they have been auto assessed for, for example, three years in a row and then the fourth year they are not.

There is no official explanation for this, but practitioners suspect it happens when SARS has picked up a change in the taxpayer’s circumstances.

SARS generally communicates publicly that taxpayers who have not received an auto-assessment by a certain date, this year it was 12 July, are required to submit a return themselves.

The problem is taxpayers who have been auto assessed for a few years and are not in the habit of filing returns do not realise that this may be applicable to them, Kennedy says.

They only realise they should have filed when they receive an administrative penalty for late submission, she adds.

Provisional taxpayers beware

Botha says he is surprised that SARS is auto-assessing provisional taxpayers.

Provisional taxpayers generally have more complex tax affairs or have multiple income streams from different sources.

He relates the case of a taxpayer who has a history of provisional tax payments. She declared her estimated annual income and made the provisional tax payment at the end of August but then received an auto assessment.

SARS had ignored her declaration and refunded her provisional payment, he said.

If she accepts the erroneous auto assessment, she is at risk of SARS realising its mistake in future.

“If that happens the taxpayer is in trouble. She will be regarded as having committed fraud by not declaring her full income and not paying provisional tax on it,” Botha says.

If she submits a revised return after the 23 October 2026 deadline (for auto-assessed and non-provisional taxpayers) but before the 22 January 2027 deadline (for provisional taxpayers), she will most probably receive a penalty for late submission.

“This after she did everything according to the book in the first instance.”

Make wise choices

“Auto assessments are a noble idea, but there are practical issues,” Botha says.

Since the responsibility for a correct return remains with you, the taxpayer, it might have been a better option to allow taxpayers who are eligible for auto-assessments to choose if they want to be auto assessed or not, rather than simply issuing an assessment and leaving it to the taxpayer to judge whether it is correct or not, he suggests.