Discontinuation of Debit Pull Transactions on eFiling

[Christel]

I'm not sure how SARS is trying to simplify service to tax payers by doing this... and why did they at least not warn us....
Discontinuation of DebitPull Transactions on eFiling
Since 2009SARS has been modernising payment and accounting processes with the aim ofempowering taxpayers to manage their financial responsibilities moreindependently, effectively and efficiently.

Starting 4 September 2013, debit pull transactions on eFiling will be phasedout and discontinued. This process will take place over a month. A warningmessage will appear on eFiling, where a debit pull transaction is no longeravailable. You are encouraged to perform credit push transactions or use one ofour alternative methods of payment.

Top tip: Where you don’t register for credit push transactionsimmediately, a Debit Pull payment option will be allowed, on condition that youagree to the declaration which appears on the screen.

“Additional Payments” on eFiling for Income Tax, Provisional Tax, Value-AddedTax (VAT) and Pay-As-You-Earn (PAYE) is not available via the Debit Pullfacility. In such the Credit Push facility must be used.

A credit push transaction refers to a payment transaction that is initiated oneFiling and presented to the banking product as bill presentation, i.e. at thebank as a payment request awaiting authorisation. You are required to log intothe banking product (e.g. internet banking) and authorise the payment requestto finalise the transaction. Credit push transactions are irrevocable onceapproved. Contact your bank for further information on how to register and usecredit push transactions.

Alternative methods of payment available include:

• Over the counter payments at a bank
• EFT – electronic funds transfer using internet banking
• At a specific SARS branch (including customs).

[Wildsniper911]

So this measn that VAT needs to be paid on the 25th of each month if you do not have the credit push facility. This is quite bad, just when you think SARS couldn't get any worse they always surprise you

[CLIVE-TRIANGLE]

I think what it means is presently you use debit pull, which means SARS "pulls" the payment after you lodged it on efiling. Whereas credit push means you still load it on efiling, but you then have to logon to your bank and authorise release of the payment. The payment dates will not be affected, I think, where you still lodge the return via efiling.

[Dave A]

I'm not sure how SARS is trying to simplify service to tax payers by doing this...

Quite simply, they're not

So this measn that VAT needs to be paid on the 25th of each month if you do not have the credit push facility.

I think you're still OK paying at the end of the month as long as you're filing your return via eFiling. As I recall it's the manual returns that have to be in and paid for by the 25th.

EDIT: I see Clive sees this the same way too.

[Christel]

Yes, this is the way I see it too, BUT just remember that the normal EFT rules will now apply, i.e. if your bank payment takes 24 hours to process, you need to take the time into account when releasing the payment.
My biggest concern is that my clients will forget to release the payment. According to the message on efiling you have to authorise the payment on the same day as what you have requested it via efiling, ... otherwise it will lapse. Then you have to request it again via efiling....

[CLIVE-TRIANGLE]

My biggest concern is that my clients will forget to release the payment. According to the message on efiling you have to authorise the payment on the same day as what you have requested it via efiling, ... otherwise it will lapse. Then you have to request it again via efiling....

I concern I share. I will most likely let them pay me so that I can release the lot at once.
If nothing else, my account will look stellar!

[Dave A]

You know what - even if I load the payment as a post-dated EFT this still isn't going to work out. If you post-date an EFT transaction using Standard Bank Internet Banking you're not allowed to change the recipient's reference number (been down this road once before for something else). And essentially each payment to SARS should have a unique PRN to ensure correct allocation.

I certainly hope the debit push payments I loaded on eFiling earlier this week for EMP201 payments go through tomorrow.

[Dave A]

It seems all is not lost yet. According to a SAIT technical release this morning:

In this regard we wish to point out that SAIT has been informed by SARS that if the taxpayer/practitioner agrees to the terms and conditions, the debit pull will still continue (that is it is not phased out yet). However, this will only apply if the payment is on a return and if the taxpayer/practitioner is not using additional payments. Thus the debit pull has not stopped, but there is a warning and a tax practitioner can still use debit pull if you agree to the terms and conditions.

It seems negotiations on the issue are well under way.

[Christel]

Thanks Dave. I really hope this is the way it will work. But still, for all other payments it's gonna be a hassle.

[Dave A]

For tax practitioners loading payments on behalf of their clients, it's still going to be a problem as things stand - the terms and conditions require the initiator of the transaction to be an authorised signatory on the bank account. May common sense prevail in the end.

What seems to have got everyone ticked off more than anything else has been the lack of consultation beforehand.

SARS decides.
SARS implements.
We're all left scrambling trying to point out issues and negotiate after the fact.

[CLIVE-TRIANGLE]

Besides this regime's propensity for fixing things that are not broken, I cant help wondering "why"? Does anyone perhaps know how it affects bank charges?

I received an interesting take this morning:
"A question was posed as to whether accepting the "terms and conditions" as you mentioned is not perhaps impossible to do by tax practitioners as you have to be a legal party to the bank account in order to do this and as a tax practitioner, you do not have signing powers on your clients' bank accounts and by selecting the debit pull option without signing powers, you could be committing a criminal offence. Is this understanding correct? Further problems with this proposed change are as follows:
• It is not possible to implement in respect of tall taxpayers particularly those who do not do electronic banking or have no access to the internet (such as farmers and fishermen who may be at sea).
• Practitioners appointed to submit and pay for taxes cannot access the client's bank accounts.
• Clients use practitioners to have payments made on time. What if client is not contactable to authorise payment?
• Employees in a company responsible for payment of eg PAYE do not necessarily have access to the bank account to release payments.
In addition, there is also a problem with the requirement that tax practitioners need to all get a USER ID for a credit push instead of the old method of debit pulls. Further details on this would be appreciated as on phoning Standard bank for this it was established that they do not issue these User IDs to non - business banking clients. So the questions is what are all the individuals going to do who use normal banking? These changes are thus causing major problems for tax practitioners and will definitely cause lots of penalties to be incurred. Your guidance and advise us on the way forward would be greatly appreciated".

[Wildsniper911]

This is SARS's reason for scrapping the Debit Pull

What are the problems associated with Debit Pull?

1. The risks are that the payment is not guaranteed and can be reversed at the request of the client and can also be rejected due to insufficient funds.

2. SARS is unable to validate that the person authorising SARS to initiate the debit pull is mandated to do so which can result in payments being withdrawn from incorrect accounts. SARS could be placed at risk as a result of such unauthorised actions. Importantly it is in the interest of the client to not allow unauthorised withdrawals from their accounts.

Reason 1: I do understand their concerns, but so what if the payments are not guaranteed and reversed by the client. The client is levied with a penalty as punishment for being late anyway, I don't believe this is going to encourage people to pay tax on time or more readily.

Reason 2: I do believe it is not SARS's responsibility to ensure payments are made by an authorised person and if it is withdrawn from the correct account. I am not sure what Risk SARS has in this matter I do believe the tax practitioner or taxpayer will be liable for this mistake?

I always make sure that the clients are informed of the amounts of VAT,PAYE or Income Tax that will be paid over and I always verify with them if the bank accounts did not change.

I think you're still OK paying at the end of the month as long as you're filing your return via eFiling. As I recall it's the manual returns that have to be in and paid for by the 25th.

Thank you for clarifying

[Julieann]

Does anybody know what the 'access number' is that is required on the credit push?

[Dave A]

1. The risks are that the payment is not guaranteed and can be reversed at the request of the client and can also be rejected due to insufficient funds.

Tough shyte - just like it is for the rest of us

2. SARS is unable to validate that the person authorising SARS to initiate the debit pull is mandated to do so which can result in payments being withdrawn from incorrect accounts.

Another "welcome to the real world" reality for any company that accepts a signed debit order from a client - certainly not a risk that can't be reasonably mitigated by the king of documentation and red tape, surely.

And if someone commits wilful fraud - nail the bastard. You know who your clients are, don't you?
If SARS can't do it, no-one can.

Ultimately, why go extreme on everyone for a few rogue operators?
Which frankly applies to a lot of what SARS has implemented of late. Take registering for VAT as an example.

[J7J]

Debit pull payment method no longer available on e-filing - now what?

Hi,

I wanted to do a VAT payment for a client tonight and when I got to the Payment Details screen on e-filing and proceeded to select the bank account name, I got a window with a message that the Debit Pull payment method is no longer available on eFiling and that I must proceed to set up the Credit Push payment option. (it seems like you can use the debit pull payment method for one month longer, if you are the legally authorised party to this bank account - which I am not sure if I am? Am a the legally authorised party to this bank account if I am acting as tax practitioner for a client?)

I am a tax practitioner, which does tax returns on behalf of my clients on eFiling. To setup the Credit Push payment option (this specific client uses ABSA Internet Banking), it seems like I need some of their internet banking login details (like the pin number). I don't think my client is going to like giving me some of their internet banking login details to set this up on eFiling. I don't even now whether this is what eFiling is asking for, as they are asking for Account Number, Access Number (are they asking for the pin here?) and user number...

If I can successfully set up the Credit Push payment option, it seems like the client needs to log in to their ABSA Internet banking and authorise this payment. How does this work on the standard ABSA internet banking?

Am I understanding this message correctly? Anyone else in the same situation?

Please help!