An assessment of the tax compliance costs of small, medium and micro enterprises in South Africa

Abstract

This study assesses the tax compliance costs of small, medium and micro enterprises (SMMEs) in South Africa. In this study, SMMEs are defined as businesses with a turnover of R250 million or less. Understanding the level of tax compliance costs for SMMEs is vital, because such costs can affect the economy negatively if they are high and the underlying factors are not addressed. One factor may be a revenue authority's behaviour, which could affect SMMEs’ tax compliance costs significantly. The study established a comprehensive baseline regarding SMMEs’ tax compliance costs in South Africa following a quantitative research design. The study also considered the effects on these costs of the South African Revenue Service’s (SARS's) power over and its ability to build trust with taxpayers. The study fills lacunae in the literature on SMMEs’ tax compliance costs and determinants of such costs, including the effects of SMMEs’ interaction with a tax authority. Using data collected from an online survey conducted among SMMEs registered with SARS, SMMEs’ tax compliance costs for the financial year ending between 1 April 2018 and 31 March 2019 were estimated at R105 609 (5% trimmed mean). Tax compliance costs per turnover group were also estimated: micro businesses spent R43 226 on tax compliance costs, small businesses R158 383 and medium businesses R254 589. Determinants of tax compliance costs were established using a regression analysis. Statistically significant determinants of tax compliance costs are the number of employees an SMME employs, its risk score, its incurring of tax-related penalties and interest, and the sector in which the SMME operates. Several constructs identified from the interaction between SMMEs and SARS were also identified as determinants of these costs. Structural Equation Modelling (SEM) analysis demonstrated that SARS’s power affects SMMEs’ tax compliance costs, but not significantly. However, trust in SARS has a significant impact, and was found to reduce tax compliance costs.

In hierdie studie is die belastingvoldoeningskoste van klein, medium en mikro-ondernemings (KMMO’s) in Suid-Afrika ge-assesseer. ‘n KMMO is in hierdie studie ‘n onderneming met ‘n omset van R250 miljoen of minder. Dit is noodsaaklik om die belastingvoldoeningskoste van KMMO’s te bereken, want indien die aanleidende oorsake daarvan nie aangepak word nie, kan hulle hoë belastingvoldoeningskoste die ekonomie skade berokken. ‘n Belastingowerheid se gedrag kan ‘n oorsaak hiervan wees omrede dit KMMO’s se belastingvoldoeningskoste kan beïnvloed. ‘n Omvattende aanvangsmeting vir die berekening van Suid-Afrikaanse KMMO’s se die belastingvoldoeningskoste is aan die hand van ‘n kwantitatiewe navorsingsontwerp saamgestel. Die gevolge wat hierdie koste het op die Suid-Afrikaanse Inkomstediens (SAID) se mag oor belastingbetalers en sy vermoë om hulle vertroue te wen is eweneens in hierdie studie ondersoek. Hierdie studie vul ‘n leemte aan in die literatuur oor KMMO’s se belastingvoldoeningskoste, die determinante daarvan, en die effek van KMMO’s se interaksie met ‘n belastingowerheid. Op grond van data uit ‘n aanlyn meningsopname onder KMMO’s wat by die SAID geregistreer is, is KMMO’s se belastingvoldoeningskoste vir die boekjaar geëindig tussen 1 April 2018 en 31 Maart 2019 op R105 609 (5% geknipte gemiddelde) beraam. Die belastingvoldoeningskoste per omsetgroep is ook beraam. Hulle belastingvoldoening het mikro-ondernemings R43 226, klein ondernemings R158 383, en medium ondernemings R254 589 gekos. Die determinante van KMMO’s se belastingvoldoeningskoste is aan die hand van ‘n regressieanalise bepaal. Onder die statisties betekenisvolle determinate van hulle belastingvoldoeningskoste tel die aantal werknemers in diens van ‘n KMMO; sy risikotelling; sy belastingboetes en -rente; en die sektor waarin ‘n KMMO bedrywig is. Verskeie konstrukte wat afgelei is uit die interaksie tussen KMMO’s en die SAID, is as determinante van hulle voldoeningskoste aangetoon. ‘n Ontleding volgens Strukturele Vergelykingsmodellering (SVM) dui aan dat die invloed van die SAID se mag op KMMO’s se belastingvoldoeningskoste onbeduidend is. KMMO’S se vertroue in die SAID het egter ‘n beduidende invloed uitgeoefen en hulle belastingvoldoeningskoste verminder

Lolu hlolo luhlola izindleko zokulandela imithetho yezentela kumabhizinisi amancane, aphakathi-naphakathi kanye namancanyana ama-small, medium and micro enterprises (SMMEs) eNingizimu Afrika. Kulolu cwaningo ama-SMMEs achazwa njengamabhizinisi anembuyekezo elingana uR250miliyoni noma ngaphansi kwaleli nani. Ukuqondisisa izindleko zokulandelwa kwemithetho yezentela ngama-SMMEs kubalulekile ngoba izindleko ezinjalo zingachaphazela umnotho kabi uma ziphezulu kanti amafektha abangela lokhu engaqashelwa. Enye ifektha kungaba ukuziphatha kwabeziphathimandla zengeniso, okungachaphazela kabi izindleko zokulandelwa kwemithetho yezentela ngama-SMMEs. Ucwaningo luthole izindleko eziyisisekelo zokulandelwa kwemithetho yezentela ngama-SMMEs eNingizimu Afrika ngokulandela idizayini yocwaningo lwe-quantitative. Ucwaningo luphinde lwabheka imiphumela kulezi zindleko ngamandla abe-South African Revenue Services (SARS) kwikhono lokwakha ukuthemba kwabakhokhintela. Ucwaningo luthasisela kwimibhalo yama-SMMEs ngezindleko zokulandelwa kwemithetho yezentela kanye nezinto ezinomthelela kulezo zindleko, ezibandakanya imiphumela yokuxhumana kwama-SMMEs neziphathimandla zezentela. Ngokusebenzisa ulwazi oluqokelelwe ngesavheyi ye-online kuma-SMMEs abhalise nabe-SARS, izindleko zokulandelwa kwemithetho yezentela ekupheleni konyaka wezimali phakathi komhla ka 1 Epreli 2018 kanye no 31 Mashi 2019, zalinganiselwa ku R105 609 (5% trimmed mean). Izindleko zokulandelwa kwemithetho yezentela ngamaqembu e-turnover zazilinganiselwa ku: kumabhizinisi amancanyana asebenzisa u R43 226 ngezindleko zokulandela imithetho yezentela, amabhizinsi amancane R158 383 kanti amabhizinisi aphakathi-naphakathi R254 589. Izinto ezinomthelela kwizindleko zokulandelwa kwemithetho yezentela zatholakala ngokusetshenziswa kohlaziyo lwe-regression analysis. Izinto ezinomthelela kakhulu

ngokwamastatistiki ngezindleko zokulandelwa kwemithetho yezentela yinani labasebenzi ama-SMMEs abawaqashayo, isikoro sobungozi, kanye nezijeziso zezentela kanye nenzalo, kanye nesektha i-SMME esebenza kuyo. Ukuxhumana okuboniwe phakathi kwama-SMMEs kanye nabe-SARS nakho kwabonwa njengento enomthelela kulezi zindleko. Uhlaziyo lwe-Structural Equation Modelling (SEM) lukhombise ukuthi amandla abe-SARS achaphezela izindleko zokulandelwa kwemithetho yezentela kuma-SMMEs, kodwa hhayi kakhulu. Kodwa, ukuthemba abe-SARS kunomthelela kakhulu nakhona kutholakala ukuthi kuphungula izindleko zokulandelwa kwemithetho yezentela.