The last days of the month are often the most exciting for employees as they look forward to spending their monthly pay cheques. Unfortunately for many taxpayers anticipation quickly turns to grief when the money they receive in their bank account is suddenly less than they had expected. Stress and anxiety then result in light of impending debit orders and monthly expenses that need to be paid.
Apart from the ordinary deductions that your employer takes off your salary each month - expenses for your benefit such as medical aid or a retirement / pension plan - there is another deduction that can take place unexpectedly: a garnishee order. In a country where many people buy things on credit, but often cannot pay back that debt reliably, micro-lenders, banks, retail stores and other institutions have the power to execute a garnishee order on their clients' salaries that often appear as a surprise deduction. Many consumers do not realise when they register with such an institution that the terms and conditions of the contract (all that fine print) might indicate their agreement to a garnishee order.
The latest SARS annual report shows a whopping 47.5% of tax payers charged with admin penalties have not submitted outstanding returns and thus have accrued monthly penalties, with interest. SARS is required by law to visit the courts to obtain a garnishee order, and whilst doing so prove that the garnishee will remain affordable for the tax payer, however this process is often easier than interacting directly with the taxpayer and thus proceeds smoothly. What results is even more terrifying than a SARS agent knocking at your door to collect your money: a simple, automated subtraction from your salary - with no questions asked.
The garnishee system is seemingly admirable in its efficiency, however with such volumes to deal with SARS is not always a reliable communicator and so taxpayers are often shocked by the amount due by them that is deducted entirely by surprise. In many instances the amount deducted, along with interest owed, can amount to most of an employee's salary, leaving them empty-handed at the end of the month. In most cases employees aren't even aware that they have given consent to SARS for such automated deductions so the shock is even greater. Employees can challenge a garnishee order from SARS, but it takes significantly more time and money than most people can afford, though tax insurance can ease the load.
The best way to ensure that SARS are not reducing your pay cheque via a garnishee order is to make sure that your taxes are up to date. Visit the SARS website when tax season opens on July 1st each year and diarise the dates by which your tax returns are due. Don't leave things to the last minute as unexpected delays can result. If you have access to the internet then SARS eFiling allows a great amount of self-service functionality so you can submit returns and know the latest status of your filing easily. To ensure you fill out your tax return 100% correctly, for maximum compliance with tax law (and for maximum potential refund) visit www.TaxTim.com and get your return done right first time, quickly and easily. TaxTim also actively helps you stay up-to-date with regular reminders and can help answer your tax questions for free. Get started now.