scholarly journals Annual tax compliance costs for small businesses: a survey of tax practitioners in South Africa

2012 ◽  
Vol 11 (3) ◽  
pp. 354-371 ◽  
Author(s):  
Sharon Smulders ◽  
Madeleine Stiglingh
Keyword(s):  
South Africa ◽  
Empirical Study ◽  
Small Businesses ◽  
Income Tax ◽  
Tax Compliance ◽  
Value Added ◽  
Baseline Measurement ◽  
Compliance Costs ◽  
Tax Practitioners ◽  
Tax Returns

This study provides a baseline measurement for annual tax compliance costs for small businesses. An empirical study performed amongst tax practitioners to identify and measure the annual tax compliance costs for small businesses throughout South Africa revealed that R7 030 per annum is the average fee that tax practitioners charge their small business clients to ensure that their tax returns (for four key taxes – income tax, provisional tax, value added tax and employees’ tax) are prepared, completed and submitted as SARS requires. From the perspective of time and cost, preparing, completing and submitting VAT returns takes the longest and costs the most. It is evident that, overall, the compliance costs are regressive: the smaller the business, the heavier the burden.

Administrative and Compliance Costs of Value Added Tax (VAT): A Review

2021 ◽  
pp. 097226612110588
Author(s):  
S. Vishnuhadevi
Keyword(s):  
Small Businesses ◽  
Tax Compliance ◽  
Value Added ◽  
Operating Costs ◽  
Tax Revenue ◽  
Compliance Cost ◽  
Compliance Costs ◽  
Factors Associated ◽  
Administrative Costs ◽  
Decision Factors

This article surveys the existing literature on the compliance and administrative costs of VAT incurred by the businesses and the governments respectively. The review focuses on the concepts and components of VAT operating costs, the link between the tax compliance costs and the tax compliance decision, factors associated with compliance costs and the steps taken by various countries to mitigate these costs. The major studies of VAT compliance cost since 1980 and the methodologies adopted are summarised. The review of the studies shows that the VAT compliance costs are higher and significant in both absolute money terms and relative to tax revenue in developed as well as developing countries than the administrative costs and the compliance costs are highly regressive in nature which disproportionately affects the small businesses. Further, the psychological costs are underexplored in the VAT compliance cost literature due to the difficulty in measuring them. This article also highlights the understudied area of VAT compliance costs in India and the importance of exploring the compliance burden in India.

scholarly journals Determinants of internal ta compliance costs: Evidence from South Africa

2016 ◽  
Vol 9 (3) ◽  
pp. 714-729 ◽  
Author(s):  
Sharon Smulders ◽  
Madeleine Stiglingh ◽  
Riel Franzsen ◽  
Lizelle Fletcher
Keyword(s):  
South Africa ◽  
Significant Influence ◽  
Income Tax ◽  
Tax Compliance ◽  
Regression Analyses ◽  
Compliance Costs ◽  
Internal Time ◽  
Key Drivers ◽  
Business Tax ◽  
Compliance Behaviour

Being tax compliant generates costs and these costs affect small business tax compliance behaviour and contribution. This study uses multiple regression analyses to investigate the key drivers of small business’s internal tax compliance costs (hours spent internally on tax compliance activities). This will assist Revenue Services in understanding what factors (determinants) could increase a small business’s internal tax compliance costs and might assist in managing tax compliance behaviour and contribution. The results expose the significant determinants per tax type, enabling a comparison to be made across the different tax types. Overall, turnover is the variable that had the most significant influence on internal tax compliance costs (time) (as opposed to the number of employees, which had a significant effect only on the internal time spent on employees’ tax). The analysis confirmed that there is a higher proportional burden for smaller businesses in respect of internal income tax and employees’ compliance activities.

scholarly journals Do South African Small Businesses Prefer Conservative Tax Advice To Aggressive Tax Advice?

2012 ◽  
Vol 11 (6) ◽  
pp. 697
Author(s):  
Melissa Lubbe ◽  
Gerhard Nienaber
Keyword(s):  
South Africa ◽  
Small Business ◽  
South African ◽  
Tax Evasion ◽  
Small Businesses ◽  
Tax Compliance ◽  
Rural South ◽  
Tax Practitioners ◽  
Tax Relief ◽  
Compliance Behaviour

Taxpayers relationship with tax practitioners may influence tax compliance behaviour. International research has been inconclusive on whether taxpayers prefer conservative tax approaches or more aggressive approaches. There has been only limited research on taxpayers preferences in South Africa. Several tax relief measures are available to South African small businesses as growing enterprises, but such entities may lack skilled tax staff and they therefore rely on tax practitioners. The first objective of this study is to determine whether such taxpayers prefer conservative or aggressive tax advice from practitioners. The second objective is to determine whether small business taxpayers would continue to use their tax practitioners services if they disagree with a suggested tax approach. Questionnaires were sent to 50 small businesses in a rural South African town. The data showed that most participating small business taxpayers prefer conservative advice but will agree with the tax practitioner, irrespective of the type of tax advice offered. As long as the advice does not involve tax evasion, they prefer to retain a tax practitioners services irrespective of the type of advice and their (dis)agreeing with it.

scholarly journals Understanding the tax compliance culture of private sector tax practitioners in South Africa

2014 ◽  
Vol 6 (3) ◽  
pp. 202-217
Author(s):  
Oludele Akinloye AKINBOADE
Keyword(s):  
South Africa ◽  
Private Sector ◽  
Tax Compliance ◽  
Service Needs ◽  
Tax Practitioners ◽  
Tax Returns ◽  
Telephone Calls

The paper presents the findings of a private sector tax practitioners segmentation survey conducted by South Africa Revenue Service to understand their tax compliance culture, appropriateness of SARS services to them and their client service needs. A set of structured questionnaires were administered to seven hundred and three tax practitioners in nine provinces which included open and closed questions. The level of tax compliance by the tax practitioner’s organization varies from province to province. Roughly, more than ninety percent of tax practitioners’ organizations that filed or submitted their organizations tax returns did so on time. Private sector tax practitioners are good e-filers. On average, assistance provided by SARS officials is considered to be very helpful. They prefer communication via email, internet, letters in the post, television and telephone calls. Most would like a dedicated SARS unit to serve them.

scholarly journals Are Public Sector Tax Practitioners Satisfied with the Services of South Africa Revenue Service?

2014 ◽  
Vol 10 (4) ◽  
Author(s):  
Oludele Akinloye Akinboade ◽  
Mandisa Putuma Mokwena
Keyword(s):  
South Africa ◽  
Public Sector ◽  
Professional Training ◽  
Tax Compliance ◽  
Secondary Level ◽  
Tax Practitioners ◽  
Tax Returns ◽  
Tax Education ◽  
Tax Refunds ◽  
Satisfaction With Services

The paper discusses the satisfaction with services provided by South Africa Revenue Service (SARS) to public sector tax practitioners to enhance tax compliance. A survey of 375 tax practitioners in eight provinces was made. Tax practitioners appreciate SARS services in paying tax refunds, responding to and handling enquiries, tax practitioners education and the organization of professional training/workshops. Accountants in particular strongly appreciate SARS tax practitioners education. Accountants and older tax practitioners appreciate SARS assistance in completing tax returns. Tax practitioners who work as Financial Managers, Accountants, and those who possess secondary level of education, diploma, degree or have special tax education find tax payer training to be quite useful. Older tax practitioners are more satisfied with SARS office services.

scholarly journals Pyott case: A lasting deposit for our tax heritage

2019 ◽  
Vol 19 ◽  
pp. 47-70
Author(s):  
A C Engelbrecht ◽  
G K Goldswain ◽  
A Heyns
Keyword(s):  
South Africa ◽  
Income Tax ◽  
Rental Housing ◽  
Value Added ◽  
Point Of View ◽  
Relevant Today ◽  
Consumer Protection Act ◽  
Contingent Liability ◽  
Beneficial Ownership ◽  
Gross Income

Pyott Ltd v CIR is generally regarded as the seminal case in South Africa on the tax treatment of deposits received on containers that may be returned at a later stage for a refund. This article analyses the tax treatment of deposits, prepayments and advances from a gross income point of view, as well as the possibility of claiming a deduction for the contingent liability to refund such deposit. 6The main objective of this article is to discuss the judgment in the Pyott case and establish whether the principle enunciated that deposits,received in respect of returnable containers, are taxable in full once received, can also be extended to receipts of deposits, prepayments and advances where no returnable container is involved. 7The conclusions reached are that the principles laid down in the Pyott case are still relevant today, apart from possible relief which may now be claimed under the subsequently introduced section 24C. Where no container is involved, beneficial ownership must first be established before such deposit, prepayment or advance becomes taxable, taking into account the specific provisions of legislation such as the Rental Housing Act and the Consumer Protection Act. The research has also shown coherence in the treatment of deposits for income tax purposes and other taxes, such as value-added tax.

scholarly journals The Influence of Tax Education on Obeying Tax Liability: A Statistical Methods and Results

2020 ◽  
pp. 38-52
Author(s):  
Tizazu Toma Shamana ◽  
Woldeselassie Azige Alito
Keyword(s):  
Direct Cost ◽  
Income Tax ◽  
Tax Compliance ◽  
Value Added ◽  
Simple Random Sampling ◽  
Survey Study ◽  
Before And After ◽  
Tax Education ◽  
Business Income ◽  
Wolaita Sodo

Backgrounds: In Ethiopia, taxpayers are categorized as small, medium or large depending on their business turnover or levels of income. Irrespective of one's category, taxpayers in Ethiopia, particularly Wolaita Sodo town are required to comply with VAT, TOT, Income Tax, Withholding Taxes and Customs duties in equal measure. Taxpayers will readily accept any new system introduced if they have ample knowledge to understand the system. Thus, education programs organized by custom and duty authority or public education institutions are required to enhance taxpayers' ability to understand the importance of tax on country's economic development and to increase their confidence in fulfilling their responsibilities as taxpayers. By considering the above issues, the researcher interested to investigate the influence of tax education on tax compliance attitude of taxpayers by conducting an experiment on the taxpayer in Wolaita Sodo town. The general objective of the study was to investigate the influence of tax education on tax compliance in Wolaita Sodo town. Methods: The target population for the survey study was actual taxpayers who are subject for business income tax. Only unincorporated business taxpayers in Wolaiata Sodo town are used as participants in the survey study. The target total population is 11,278 business income taxpayers as of July 2017 which is categorized under A, B and C. Only 160 taxpayers were selected by using simple random sampling from Wolaiata Sodo town. Questions regarding employment income, business income, turn over tax, and excise and value-added taxes are asked. Respondents are also asked to state whether the direct cost of producing the income, such as the direct cost of manufacturing, purchasing and selling costs shall be deductible from gross income in calculating taxable business income. Before and after the experiment (tax education) respondents were asked to check whether they know basic taxation rules. And their marks scored for the 7 basic questions after and before tax education out of 50 marks are recorded. Results: Majority of the respondents after attending the tax course scored high value regarding the tax knowledge. There is a great difference between the tax compliance attitude of these respondents before and after attending the tax course. Before attending the tax course, majority of respondents showed the plan of not complying with tax laws. But after attending the tax course, the majority of the respondents proves the identification of taxable and non-taxable income types. Generally, it resulted that the tax knowledge of respondents is improved after attending the tax course.

scholarly journals Factors driving tax compliance costs of small businesses in the South African construction industry

2019 ◽  
Vol 19 (1) ◽  
Author(s):  
Obert Matarirano ◽  
Germinah E. Chiloane-Tsoka ◽  
Daniel Makina
Keyword(s):  
Construction Industry ◽  
South African ◽  
Small Businesses ◽  
Tax Compliance ◽  
The South ◽  
Compliance Costs

scholarly journals Tax Literacy

2018 ◽  
Vol 66 (2) ◽  
pp. 553-559
Author(s):  
Michaela Moučková ◽  
Leoš Vítek
Keyword(s):  
Income Tax ◽  
Response Rate ◽  
Statistical Tests ◽  
Value Added ◽  
Practical Experience ◽  
Personal Income ◽  
Personal Income Tax ◽  
Two Factors ◽  
Tax Returns ◽  
The University

Presented paper focuses on measuring tax literacy among bachelor degree students at the University of Economics, Prague, along with analysis of the two factors that influence it. Based on the 150 collected questionnaires (63 % response rate), we measured tax literacy of students (personal income tax and VAT) and examined whether it depends on (i) previous passing of tax courses and (ii) previous practical experience with filing tax returns. More than half of the students were well to excellently-versed in tax matters, including those who have not completed any more advanced tax courses apart from the elementary tax course. For VAT, the results of statistical tests show that students’ knowledge depends on passing a more advanced course on consumption taxation. On the other hand, the link between experience with tax returns and results of tax literacy tests cannot be unambiguously confirmed or rejected. Within the first statistical test (personal income tax), it was established that students’ knowledge does not depend on previous filing of tax returns; the second test (value added tax) led to the opposite conclusion.

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