FAQ: Why isn’t my income tax refund bigger?

We’re into the second month of eFiling. Tax season officially opened on July 7 2023 and you have until October 23 2023 to submit your income tax return to see if you might qualify for a tax refund.

ALSO READ: Should you file a tax return if you earn less than R500k?

In the last six weeks, our WhatsApp line has received multiple messages asking the same question. Why isn’t my income tax refund bigger? If you’re wondering the same thing, we’ve roped in the help of tax experts, TaxTim, for their specialist advice.

WHY YOUR INCOME TAX REFUND ISN’T BIGGER

TaxTim says, in their experience, the question about “why isn’t my income tax refund bigger?” pops up every year. It’s a misconception most South African taxpayers have that they are owed something annually. Not to mention that what they’re getting back is LESS than it ought to be.

DEDUCTIONS INCREASE YOUR CHANCE OF A REFUND

TaxTim says if when your monthly Pay-As-You-Earn (PAYE) tax is calculated, and SARS or your employer is unaware of certain deductions, this could result in too much tax being deducted.

ALSO READ: Investing offshore? Take a look at these new SARS regulations

Stuff like medical aid, retirement annuity contributions or any other income will reflect an over payment of tax, and that’s when an income tax refund is due to you. And SARS will dutifully pay it back to you after the eFiling process is complete.

ALSO READ: What to do if you receive a SARS Additional Assessment

Everyone’s tax affairs are different of course, but TaxTim insists this is why it is essential that you complete your tax return 100% correctly and accurately. If you don’t, you could be leaving an income tax refund on the table.

A TAX REFUND IS YOUR MONEY

However, no income tax refund or rebate is owed to you automatically after you’ve completed your return. Likewise, TaxTim says there is no evidence to prove that taxpayers are receiving any more or less in refunds this year.

ALSO READ: What’s new with SARS eFiling this tax season?

The rationale from taxpayers seems to be that if you dutifully pay your taxes each month, a portion will be waiting for you at the end of the year. Like a type of 13th cheque from a savings account.

ALSO READ: Are you in debt to SARS? Here’s your next step

The reality is your tax goes to the South African Revenue Service (SARS) to run the country and a refund only arises if you’ve paid too much tax over the course of a year.

CHECK AND DOUBLE CHECK

This also applies for checking your SARS auto assessment. You should exercise the utmost attention and include all possible information to maximise your chance of a tax refund.

ALSO READ: SARS eFiling issues: Here’s what you do to fix the problem

However, if you have completed your return and you wonder why your tax refund isn’t bigger, the real reason is because your tax affairs are probably pretty straightforward. The PAYE deducted is the exact right amount of tax paid. So neither SARS nor the taxpayer owe each other anything.

UPDATED: Where you’ll find SARS mobile tax units for August

To see if you could be due a refund this year, you can try TaxTim’s free tax refund calculator HERE.

Individual taxpayers have until October 23 2023, to review and file their income tax return.

This article is for informational purposes only and should not be construed as financial, tax or legal advice. For further details consult the SARS website or get in touch with a tax specialist like TaxTim.