Small business owners ‘need support with handling tax affairs’
21 November 2014
Posted by: Author: Amanda Visser
Amanda Visser (BDlive)
The cost of
regulatory compliance for small businesses and entrepreneurs in SA is
"prohibitively expensive" with current research showing that this
could run close to R60,000 a year for a typical business.
African Institute of Tax Professionals is calling on the South African Revenue
Service (SARS) to establish a small business centre to support and guide small
business owners in their tax affairs.
enjoys success with their large business centre, which is a world-class
facility that helps large businesses fulfil their tax obligations. Now is the
time to focus on small businesses and to provide them with the tools and
support services so that they can develop, create jobs and contribute to the
economic wellbeing of the country," said the institute’s CEO Stiaan Klue.
He referred to
the 2014 Tax Statistics bulletin, compiled by SARS and the Treasury, which
pointed to an increase in the tax burden.
indications are that the burden would rise even further next year. The figures
showed that individuals contributed 34.5 per cent of the total tax revenue in
2013-14 compared with the declining 19.9 per cent from companies.
Mr Klue said
the general belief was that there is little room left to increase tax rates in
SA, and that the only sustainable solution to the impending financial woes —
resulting from weak economic growth and hence a higher tax burden — was to work
towards growing the economy.
from Statistics SA showed that the number of people running informal businesses
declined from 2.3-million in 2001 to 1.1-million in 2009. It increased
marginally to 1.5-million last year.
launch of the survey in August, statistician-general Pali Lehohla said many
people had started their own businesses because of unemployment. The survey
shows that the informal sector accounts for 5-6 per cent of SA’s gross domestic
product, but contributes 15.8 per cent of total employment. Most of those who started
generating their own income had to borrow from friends or family to do so.
However, loans obtained from commercial banks for this purposes have risen from
4 per cent in 2001 to 16.6 per cent last year.
Mr Klue said
support for small and medium-sized entities was vital if the country was to
extract itself from a "precarious financial position" and achieve the
economic growth rates required.
In a recent
survey by the tax professionals body, 65.5 per cent of participating tax
professionals said they considered compliance with tax laws as "the most
daunting challenge" for small businesses.
More than 46
per cent of respondents said in their experience the SARS service was not
helping to support small businesses.
first appeared on bdlive.co.za.