TAX COMPLIANCE: AN ADMINISTRATIVE BURDEN FOR SMALL BUSINESS ENTERPRISES (SME’S)

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Abstract

As is the case in many economies, tax laws are sometimes very complicated and difficult for SME’s to understand and to implement. Tax laws change every year, impacting on the business, its operations and its profitability. It is also a fact that the more a government overspends, misappropriate funds and overall lack fiscal control, the more they will try and recover these “losses” from the taxpayers - including SME’s. The main purpose of the study is to investigate whether small business enterprises are burdened by the administrative processes required in South Africa to comply to with the tax regulations of the country. The South African government has strict policies and procedures in place that all businesses should adhere to. However, the key challenge that many SME’s still face is that of red tape and burdensome regulatory processes and procedures. In an attempt to establish the main objective of the study, a quantitative approach research approach was employed and a significant amount of small businesses were surveyed. From the findings it is clear that the respondents of the survey agree that the tax services registration documentation and process should be made easier. The submission of the registration documents, once understood and completed, is not a big problem for the respondents. The cost of registration does not seem to be a major burden to the SME’s.

Keywords: Tax Laws, SME, Challenges, Survival

How to cite this paper: Sephapo, C. M., Cant, M. C., & Wiid, J. A. (2016). Tax compliance: an administrative burden for small business enterprises (SME’S). Corporate Ownership & Control, 13(4-2), 350-361. https://doi.org/10.22495/cocv13i4c2p7