By Vukani Mkhize
South Africa‟s small businesses face an unnecessarily high tax burden when
one considers the tax compliance costs 63.
It is submitted in the Foreign Investment Advisory Service (FIAS) report that it
costs the average small business R1 478 to register, which is one reason why
about 60% of them decide to stay „informal‟64.
The research contained in the FIAS report was performed at the request of
the National Treasury and the South African Revenue Service (SARS). It
measures the time and cost burdens for small businesses in SA in paying four
main taxes (corporate tax, provisional tax, value-added tax and employees‟
tax), including registration for taxes, tax return preparation and filing, queries
and objections, inspections and audits65.
The FIAS defined small business as including small and medium enterprises
with a turnover not exceeding R14 000 000 for the purposes of their study66. It must be noted that although R14 000 000 is the turnover threshold for SBC,
the study was intended to cover all small businesses including natural