By: Anna Majavu
SMMEs make a huge contribution to South Africa’s gross value-added but are not taken seriously by the SA Revenue Services (SARS), according to Sustainability Practitioner Sibusiso Nyathi, who owns Ubuntunomics sustainability consultancy. They are left to struggle with maintenance outages on the e-filing system and a MobiApp that goes offline intermittently. Nyathi said told Vutivi News SARS’ services remained “heavily skewed towards medium and large enterprises” even though SMMEs contributed 40% to South Africa’s gross value-added in 2020, up from 18% in 2010.
“One would have thought that this would encourage SARS to concentrate on this growing contributor, to harness this greenfield. SARS does not take the SMME sector as seriously as they should,” Nyathi said. President Cyril Ramaphosa said in his recent State of the Nation Address that SMMEs created the most jobs, particularly for impoverished people and that the government would “undertake far-reaching measures to unleash (their) potential”.
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But Nyathi said proper tax services for SMMEs may not materialise as long as SARS continued to prioritise the top four contributors to the tax coffers. Personal income tax made the highest contribution to the 2022 budget at 41%, up from 38% in 2020, VAT was the second highest contributor at 31%, up from 25% in 2020, corporate income tax contributed 19%, followed by customs and excise tax at 8%. “It is easy to see that the lowest hanging fruit are the above, which explains the strategy and alignment by SARS,” Nyathi said.
SMMEs have criticised SARS for tailoring its services towards big business, with many unable to afford their own tax practitioners. With most of them registering for taxes and filing their tax returns on smartphone apps, it falls to business owners to spend hours trying to do their taxes on glitching platforms. But SARS spokesperson Anton Fisher said SMMEs should have no problem in conducting all their tax business online – from registering for tax, declaring income, filing tax returns, making tax payments, and deregistering if their businesses stopped operating.
SARS’ three-year-old SMME unit has conducted education and outreach, including webinars to help them work through their tax affairs, he said. “SARS has a dedicated SMME webpage that has SMME business-related information, forms and other notifications that are regularly updated,” Fisher said. He added that the unit recently carried out research to find out how SMMEs experienced SARS so that it could improve its services. But even with tax workshops for SMMEs and mobile tax units, SARS must do more to ease the burden on SMMEs of filling out forms alone, Nyathi said. Fisher urged these businesses to look out for the revenue service’s SMME Connect newsletter and social media updates every Thursday.
