The South African Revenue Service (SARS) disclosed the changes made in the tax compliance status regarding funds that are transferred abroad.

SARS issued a statement on Wednesday, revealing that the previous Tax Clearance Status (TCS) solution has processed substantial and growing volumes of taxpayers that required third-party verification including Foreign Investment Allowance and Emigration since April 2016.

Considering the volume of taxpayers is increasing, SARS shared that it needs to improve its system in order to speed up its work. Moreover, the South African Reserve Bank (SARB) announced that the requirement to apply for MP336 application had been removed.

SARS' statement also shared that the new TCS system was introduced on April 24, last month, after consulting authorized dealers and the SARB.

"The TCS system supports the strategic objectives of SARS to make it easier for taxpayers to comply," the statement mentioned, SANews reported. "It also entrenches TCS verifications in government, private sector, and individual taxpayer space, either voluntarily or via legislation."

SARS explained that the changes have made it easier for the compliant taxpayers while the taxpayers who are unwilling to comply will find the changes in tax compliance difficult.

"The additional information requested on the Approval for International Transfer (AIT) Application allows SARS to ensure that all required tax payable has been accounted for and, if required, address any non-compliance that is detected through a verification and/or an audit," SARS explained.

It added, "This forms part of the SARS modernization journey that aligns to our strategic intent of voluntary compliance."

SARS noted that no Tax Clearance Status is necessary for those who make yearly transfers of up to R1 million, adding that these taxpayers "should reasonably have records of the cost price of major assets they own."

These "major assets" include local and foreign fixed properties, listed/unlisted investments, crypto assets, and cash in the bank. "If the taxpayer does not own a particular type of asset, that should be captured as zero on the asset and liability part of the application form," SARS concluded.

SARS has also shared an in-depth guide document to explain to the taxpayers how to file their taxes and understand the changes made.

SARS is a tax collection government agency that is responsible for various types of tax collection including income tax, value-added tax (VAT), customs duties, excise duties, and other taxes and duties.

The agency was founded in 1997 and it also plays an important role in the economic development of South Africa as it provides revenue to fund several government services and programs.

Customer conducts a mobile money transfer at a Safaricom agent stall in Nairobi