PractitionerNews
Issue 2, June 2007, Closure of FNB Nominated Accounts
Dear Colleagues
Closure of SARS nominated FNB accounts
Last year SARS expanded and enhanced its payment options to reduce the potential for errors and
incorrect payments by introducing new payment channels. The successful conversion from the
previous system of nominated FNB accounts to the new Beneficiary ID system via FNB, ABSA,
Standard Bank, and Nedbank has enabled SARS to now close its nominated FNB accounts.
Practitioners are therefore advised that with effect from 31 July 2007 all electronic tax and customs
payments must follow the new payment process as outlined below. Payments made into the old FNB
nominated accounts will not be processed by the banks from 31 July 2007.
We are attaching a notice with more detail in this regard.
We are also including a quick guide and answers to anticipated questions relating to the closure of the
nominated FNB accounts.
Quick guide to closure of the nominated FNB accounts
Frequently Asked Questions and Payment Rules can also be accessed via www.sars.gov.za – select “SARS
payment options“ under the taxes menu
How these changes impact you depends
on the channel you currently use to pay
SARS – Do you use….
…SARS eFiling
…..the Internet at FNB,
ABSA, Standard, or
Nedbank
...your “line of business
system” eg SAP,
Pastel, AccPac,
PeopleSoft, Brilliant,
etc
No Impact – unless
you want to pay
Customs & APT in
which case the
solution will be ready
towards the end of
June 2007
Have you already
converted to the
Beneficiary ID (refer
FAQs: Q8, Q9, Q10
The impact
depends on the
bank you
belong to
…..the Internet at any
bank other than FNB,
ABSA, Standard, or
Nedbank
….the following cha
 A SARS office
 Over the counte
FNB, ABSA, St
Bank, Nedbank
 Via debit order
No Impact
If you bank at:
 Mercantile
 Investec
 CITIBank
YES: No Impact
Refer to Paym
Rules in Q1
If at FNB, ABSA,
Nedbank, or
Standard Bank
NO: Then
you need to
convert.
Refer FAQs:
Q10 and Q8
Please
contact your
bank
regarding
the impact
If at any other
bank use the
same process
as internet
above for
“other banks”
NO: You need
to use an
alternative
channel
o
YES: Your bank is
working on a solution to
enable you to use SARS
eFiling - which will mean
that there should not be
any impact on you –
Please consult with your
bank regarding
timelines
You may register for
eFiling and use the
debit order function
until the credit push i
available.
Anticipated questions
1
What is the
relationship between
SARS and the
country’s four
commercial banks?
FNB, ABSA, Standard Bank and Nedbank not only act as SARS’s bankers,
ensuring that all monies banked are safeguarded and transferred to the
National Treasury, but also provide payment channels that can be used by
taxpayers and traders to pay SARS. These channels include:
Over-the-counter payments where payments can be made at any FNB, ABSA,
Nedbank, and Standard Bank branch country-wide; and
• Internet payments where payments can be made into SARS’ nominated FNB
banking accounts or by using the new Beneficiary Account ID process offered
by
FNB, ABSA, Nedbank and Standard Bank .
These two channels complement SARS’s other payment channels which
consist of:
• SARS cash hall and mail payments;
• Debit orders issued
2
Why is this
relationship
restricted to only the
four commercial
banks?
3
What is the
implication of
restricting SARS to
only the four
commercial banks?
SARS’s relationship with the country’s financial institutions is governed by the
National Treasury Tax & Loan Agreement. This agreement sets out the specific
requirements that a qualifying bank must adhere to in order to operate as one
of SARS’ banking partners. At present only the four commercial banks, namely
FNB, ABSA,Standard Bank and Nedbank, are permitted to act as SARS’s
bankers.
The implication is that the other banks are unable to receive SARS funds and
can therefore only assist taxpayers/traders in effecting payments, for example
via internet, into one of SARS’s nominated accounts held by one of the four
commercial banks. SARS is also able to collect taxes and duties using the debit
order instruction method.
4
Why did SARS
initiate this project?
5
Why are incorrectly
referenced
payments such a
problem?
The project was initiated for two primary reasons:
• Firstly, to make more payment channels available by allowing taxpayers and
traders the opportunity to pay at any one of the four commercial banks, namely
FNB, ABSA, Standard Bank and Nedbank. This was previously limited to FNB
only.
• Secondly, to streamline and improve back-office administrative processes in
order to become more efficient and cost effective. Investigations reveal the
significant impact that inaccurate and incomplete payment transactions have on
SARS’ entire operations; from servicing payment enquires, collecting
outstanding payments, to reporting to National Treasury. At the start of this
initiative SARS was receiving between 65 000 and 75 000 incorrectly
referenced electronic transactions from taxpayers and traders every month.
This initiative has already achieved a 60% improvement in payment accuracy.
Tax and Customs legislation require that payments are allocated to taxpayer
and trader accounts in a specific manner. These payment allocation rules
enable the correct calculation of interest, penalties, and outstanding monies
that is owed to SARS. The identification of who is paying, what is being paid,
and to which tax period the payment relates, is imperative for our computer
systems to operate. If these payment details are missing or incorrect the result
is a delay in updating SARS’s tax and customs systems. This in turn can lead
to:
• Incorrect allocation of payments
• Incorrect initiation of costly non-payment processes (queries,
demands/summons etc)
• Incorrect penalties and interest charges levied
• Incorrect financial reporting
• Costly correcting processes
• Taxpayer and trader dissatisfaction and frustration.
To prevent this, it is imperative that each payment service offering complies
with SARS’s prescribed validation criteria. This has necessitated some changes
to the current payment channels offered by the four commercial banks.
Yes - the four commercial banks have recognised the need for implementing
the required validation checks as prescribed by SARS and have incorporated
this into their systems. The banks also recognised the issues associated with
incorrectly referenced transactions and the actions that are necessary in
resolving these problems. This partnership also aims to increase the number of
payment service offerings to their clients as part of their own strategy for
sustaining service excellence.
6
Did the banks
support the need for
these changes?
7
What are the
changes that have
already been
implemented?
A number of changes have already been implemented:
• The four commercial banks have implemented payment reference verification
checks on their electronic banking channels in order to prevent incorrectly
referenced transactions.
• New payment channels were introduced in March 2006 with the addition of
ABSA, Standard Bank and Nedbank over-the-counter and internet payment
channels.
• Unique Beneficiary Account IDs has been introduced replacing the need for a
banking account. The impact of this is that taxpayers and traders will no longer
be
able to view / add SARS banking account numbers but must make use of the
bank’s preconfigured beneficiary ID listing to create SARS as a beneficiary
when paying SARS electronically.
• SARS eFiling is being extended to cater for Customs and APT payments. This
is due to go live during June 2007.
• SARS eFiling is also being extended to Mercantile, Investec, and CITIBank.
Affected clients are required to contact their respective banks regarding the
impact and timing of the release of this solution.
8
Will all taxpayers
and traders be
equally affected by
these changes?
The impact of these changes will vary according to payment channel used:
• Internet - there has been a direct impact on those taxpayers and traders who
currently use internet banking to pay SARS. Clients have been requested to
convert to the new Beneficiary Account ID payment process. Additional
changes are also expected in the future - refer Q13.
• Payment at FNB branches – there has been an impact on taxpayers and
traders using over the counter payment facilities at FNB branches to pay SARS.
These changes impact the procedure of making a deposit at the bank, in other
words, how the deposit slip is completed.
• Other – Taxpayers using other channels to pay SARS will have a greater
selection of payment channels to use with the introduction of ABSA, Standard
Bank and Nedbank over-the-counter facilities and the extension of eFiling. The
over-the-counter facility at the new banks is unfortunately limited to tax
payments and does not, at this moment, apply to customs and excise
payments. In this regard, (manual) customs and excise payments continue to
be accepted at Customs offices and FNB branches. These changes have been
in place since March 2006.
9
What is the impact of
the introduction of
the “verification
check”?
The introduction of payment verification checks will result in incorrectly
referenced transactions being rejected at the time of loading the payment if they
fail to conform to the rules set out in Operational Instructions (Q16). While all
four commercial banks use the same validation rules, the actual “look and feel”
of these changes is different across the banks and clients are encouraged to
consult their respect bank.
10
What is the impact of
the introduction of
the “beneficiary
account IDs”?
SARS clients only need to provide a 19-digit payment reference number and
the appropriate Beneficiary Account ID to make payments. The process of
replacing the payee’s (SARS) banking account details with a Beneficiary
Account ID (e.g. SARSVAT, SARS-PAYE, etc) enables a payer to make
securepayments to a payee without the bank or the payee having to divulge the
banking account details of the latter to the payer:
 If paid electronically (via the internet) – using a dropdown listing of preloaded beneficiaries
 If paid over the counter (at the bank) – by quoting aunique customer ID
The beneficiary account IDs used by SARS are indicated below under the
section entitled, Operational Instructions (Q15).
What is the impact of
the extension of
payment channels to
ABSA, Standard
Bank and Nedbank?
What is the impact of
the consolidation of
electronic channels
to SARS eFiling?
To increase accessibility and ease of paying.
13
What are the future
changes that can be
expected?
With effect from 31 July 2007 electronic payers will no longer be able to deposit
Tax and Customs payments using SARS’ nominated FNB account numbers
displayed in Q14 . All payments made using these accounts will be rejected by
the banks. Taxpayers and traders that want to pay SARS electronically must
utilise the Beneficiary Account ID payment process outlined in Q10. This
payment process has been available since March 2006.
14
Which bank
accounts will be
closed?
The following FNB accounts will be closed with effect from 31 July 2007.
15
What are the
Beneficiary Account
IDs that must be
used when paying
SARS?
The following table lists all relevant Beneficiary Account IDs:
16
What are the
payment rules that
The payment rules are base on the 19-digit number that is used as the payment
reference on the relevant tax forms. The payment reference number tells SARS
11
12
eFiling is SARS’s preferred electronic payment channel. It is SARS’s strategy to
expand the eFiling service offering, and in the case of revenue management,
ultimately migrate to a situation where account and payment allocation and
reconciliation can occur on line. This will mean expanding accessibility of SARS
eFiling to all banks and not just the four commercial banks.
apply to each
beneficiary account
ID?
exactly who the client is and enables the allocation of payment to the correct
taxpayer and tax period.
The 19-digit reference number is made up as follows:
• The first 10 digits relate to your tax / duty reference number. This number
ensures that the payment will be credited to your tax / duty account and not
someone else's. In the case of Customs and Air Passenger Tax payments, the
first two digits relate to the branch office code and “00” respectively. The
remaining eight digits, in both instances is the customs code.
• The 11th digit refers to the tax type. This character will vary depending on the
type of tax being paid, for example “V” stands for VAT, “P” stands for
Provisional Tax, etc. The table below lists all the tax types which can be paid at
a branch of one of the relevant banking institutions.
• The last 8 digits refer to the period for which the payment is being made. The
date format used is ddmmyyyy. The particular date used is dependant on the
tax/duty type being paid. In most instances the taxes are not day specific and
only require the month and year. In this instance the first two digits of the date
format must be “00”. In the case of assessed tax, all fields will be zeros. The
specific date formats per tax/duty type is contained in the table below.
• In the case of “Other Taxes & Levies”, such as Small Business Amnesty
payments, which are not period-based the last 8 digits represent an account
type. In the case of the Small Business Amnesty this is “00000153”.
The following table lists all relevant banking institutions tax types, beneficiary
IDs and date references for the purposes of compiling the 19-digit payment
reference number:
17
18
When making a
cheque payment
over the counter at
one of the relevant
banking institutions,
to whom should the
cheque be made
out?
What documents do
taxpayers and
traders require when
making over-the-
In order to prevent any fraudulent activities clients are requested to make out
their cheques to South African Revenue Service in full and not use the
abbreviation SARS.
In order to facilitate the process and prevent any delays or inconvenience as a
result of providing incorrect payment details,taxpayers and traders are
encouraged to bring a copy of their tax return/remittance that details the
beneficiary account ID and payment reference number.
19
counter payments at
qualifying bank
branches?
Where can clients
obtain more
information?
20
Will the banks still
charge their clients
transactional fees?
21
Can I also submit my
tax form at the
bank?

The call centres of the four major banks (ABSA, Standard Bank, FNB
and Nedbank) and SARS are geared to take calls and guide clients or
answer any queries that they might have.
 SARS National Call Centre: 0860 12 12 18
 SARS website: Visit www.sars.gov.za and refer to payment rules under
the taxes menu in order to view the SARS updated payment rules and
validation requirements.
Normal Internet Banking rules and laws apply and banks charges will apply as
per banks’ service charge charter.
No. Even though payments can be made electronically or over the counter at a
bank, you are still required to submit your returns to SARS on time.
You told us…
Following on our earlier newsletter, we received a suggestion that we use fewer colours and graphics in our
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