THE 29 August deadline for submitting reconciliations for the 2008 tax season might prove too tight for business owners as many of them may be ill prepared to cope with the changes.

Last month the South African Revenue Service (Sars) announced that it would be implementing changes to Pay As You Earn (Paye) tax which makes up 95% of the Personal Income Tax (PIT) system revenue.

These changes would result in business owners having to submit reconciliations before employees are allowed to submit tax returns.

By enforcing the changes Sars aims to ensure that all employers submit reconciliations. Last year only 60% of business owners submitted reconciliations for the 2007 Tax Season.

According to Johan Troskie (pictured above), tax director at Deneys Reitz, the time period Sars has allocated for smaller business owners to familiarise themselves with the process and the software, is not enough.

“Unlike large businesses that have entire financial departments to deal with these changes, business owners who do everything themselves will have problems with time,” says Troskie.

“If I look at myself and colleagues who are still experiencing problems with e-Filing to this day then business owners who are not familiar with the system will end up with an added burden,” says Troskie.

He says Sars needs to accept that business owners will experience problems implementing these changes and should not act too harshly if the deadline is not met.

In theory Sars tries to make things easier for business owners, but in practice implementing these changes takes a lot of time and requires a lot of work, he says.

However, Troskie acknowledges that in the long-term e-Filing will be best. He feels only time will tell how efficient Sars is in making the system user-friendly.

CEO of the Johannesburg Chamber of Commerce and Industry Keith Brebnor, says the deadline is tight but Sars is trying to cut out red tape.

“I think we can expect the first year to be tough, but once business owners get used to the process, things will run more smoothly,” says Brebnor.

He is impressed with the new process and does not foresee any major glitches for business owners who have been doing their reconciliations electronically.

Albert Schuitmacher, CEO of the Cape Town Regional Chamber of Commerce and Industry, says they will be hosting workshops in partnership with Sars to assist members and non-members in completing and submitting reconciliations.

“I think ‘teething problems’ will be minimal although there will obviously be more pressure on business owners but in the end it is a good system,” says Schuitmacher.

He says the Chamber will be hosting workshops separately from the ones that Sars will be hosting and these will run from July until August.

When Bignews spoke to the Small Business Advisory Council’s (SBAC) Yvonne Finch, who specialises in training and skills development, she was unable to say whether the SBAC had been consulted on the matter.

Finch advised Bignews to speak to Thami Mazwai, head of regulations at the SBAC, but Bignews was unable to reach him.

Contact Sars on 0860 12 12 18, Cape Chamber on 021 402 4333 and JCCI on 011 726 5300.