“I like to pay taxes. With them, I buy civilization.” –Oliver Wendell Holmes, Jr.
Did you realize that tax day was just a couple of weeks ago? On November 25th, many Americans were sleeping off a tryptophan coma from eating too much turkey. Here in South Africa, I was breathing easier because I had navigated my first time filing taxes with the South African Revenue Service, or SARS. The 25th was the deadline for individual filing.
I have mentioned SARS once before, when I filed to acquire a taxpayer ID number shortly after starting work at my university. Dealing with taxes is pretty similar to what I experienced in the United States. I do not receive my gross salary each month. Instead, I receive my payment minus the cost of benefits (such as my medical scheme) and minus tax withholding. Those deductions, however, are pretty serious. In a given month, I generally receive about 56% of my nominal salary.
“Death, taxes and childbirth! There’s never any convenient time for any of them.” –Margaret Mitchell, Gone with the Wind
Filing a tax return with SARS is how I get the excess withholding back in my bank account. Taxpayers can file paper forms, or they can eFile, or they can use a tax preparation service. Because I have been a TurboTax user for years, I decided to try the South African equivalent, TaxTim. Because the tax code is a bit simpler in South Africa, the number of questions I needed to answer was slightly shorter. When I went through this process on November 10th, the software eFiled my return to SARS. Unlike the TurboTax experience, though, I still did not know whether my answers implied that I would owe more money or receive money back!
I had my answer very quickly, though. SARS sent me a secure message right after my filing to say that I was receiving a very generous return of taxes (I had only worked at this university for three months by the end of February, when the tax year ends). The message included a note, though, that I would be required to submit many documents for verification. My heart sank, because the office in Bellville was likely to be incredibly busy this close to the deadline.
The wages of sin are death, but by the time taxes are taken out, it’s just sort of a tired feeling.
I organized my paperwork into PDFs on a USB flash drive and got them printed at the mall over lunch (I had not yet acquired a home printer). I parked near the SARS office and walked toward it. Yes, the line was substantial, stretching perhaps 40 meters outside the building. Some employees from Nedbank were trying to convince people in line that they should establish accounts (millions of people in South Africa do not make any use of formal banking). After around 45 minutes outside, I was allowed into the building to sit in a large holding area. As a tranche of people were allowed out of the holding area, the attendants maneuvered the next section of people into position. After another 45 minutes, I was upstairs in a smaller holding area. After 25 minutes sitting up there, my number was called, and I was talking to SARS!
My conversation with the SARS employee was understandably pretty brief. She asked for the documents, and I handed them across. She photocopied them and then stamped my original cover sheet (South African bureaucracy is a big believer in the ink stamp). I had brought my passport in order to verify my dates of entry to the country, but I forgot to bring it out for photocopying. Once I had my papers back, I was free to return to my car. To have spent only two hours at the office so close to the deadline was very encouraging. Many people have commented that SARS is one of the most efficient of government services.
“The invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don’t have to pay taxes– naturally, no one wants to live any other way.”
With that, I was done with the tax process. I received my next message from SARS on December 5th. The letter notified me that SARS had required some adjustments to my return because of the documents I had submitted for their consideration. Instead of a very big return, I was getting a pretty big return (diminished about a sixth). The requirement that I show my passport had vanished, happily. The complex part was that they had registered the change as a payment I needed to make to them in order to receive the larger payment corresponding to my unamended return. I was busy at work and so I could not act immediately. Happily, though, SARS realized that they could simply deposit less rather than having me pay them more first. During the week, the tax refund arrived in my bank account. I am all clear for taxes in 2016!
The really interesting part will come next year, when I must learn how to file taxes for calendar year 2016 with the United States. All of that income will be for a year in which I was out of the country. At that point, the tax treaty between South Africa and the United States will come into effect. As I understand it, the United States will not tax me further on my salary so long as I have already paid at least as much tax to the government of the country where I live. We’ll cross that bridge when we come to it!