Income tax will be subject to self-assessment instead of assessment by SARS.
Self-assessment implies that the taxpayer must determine the amount of tax to be paid and must submit that on a return to SARS (as is the case with a VAT return, for example). The budget proposes that this will in future also be the case for income tax. The major difference between a self-assessment and an assessment by SARS is that the prescription period for an assessment is 3 years, whereas the prescription period for a self-assessment is 5 years. Given that the e-filing system in practice issues a face value assessment of all income tax returns submitted almost immediately, the current prescription period effectively gives SARS only 3 years from the date of the submission of the return to audit the taxpayer. SARS is therefore in effect trying to extend the prescription period for income tax to 5 years.