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Theses and dissertations (Accounting and Informatics)

Permanent URI for this collectionhttp://ir-dev.dut.ac.za/handle/10321/4

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Subject: search.filters.subject.South African Revenue Service (SARS)

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    The tax compliance burden in the functioning of small and medium-sized enterprises in the Durban Central Business District
    (2023-03-01) Buthelezi, Lungisani Lucky; Stainbank, Lesley June; Mutanda, Mary
    Several attempts have been made to examine the effect of tax compliance burden in the functioning of small and medium-sized enterprises (SMEs) but to date, tax compliance is still a constraint in the functioning of SMEs. The purpose of this research was to evaluate the tax compliance burden in the functioning of SMEs in the Durban Central Business District. The study examined the effect of tax compliance burden using a quantitative method, with data collected via questionnaires from SMEs and tax practitioners in the Durban Central Business District. The latest version of the Statistical Package for Social Sciences V1.0.0.1406 was used to analyse the results. The study found that SMEs and tax practitioners both agreed that the tax compliance burden has a significant impact on the failure, performance, and growth of SMEs. They also agreed that high tax rates encourage noncompliance with tax laws, leading to SMEs concealing profits and a significant number of SMEs remaining in the informal sector. The analysis revealed that almost all the SMEs had never received any tax training and that SMEs rely on the services of tax practitioners to be tax compliant. SMEs and tax practitioners agreed that being tax compliant benefits SMEs. Low tax rates, electronic filing and payment of taxes, and government payments to tax practitioners to provide free services to SMEs in tax filing and record keeping are all very important in lowering tax compliance costs, as is frequent tax education, with practical and simplified tax laws. These results demonstrate that tax compliance burden is a constraint in the functioning of SMEs. The study recommends that the South African Revenue Service assists SMEs in reducing their tax compliance burden by increasing tax education and tax incentives for SMEs, paying tax practitioners to provide free services to SMEs or by assigning a tax practitioner to an SME for its first five years of operations.
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    The relationship between tax knowledge and tax compliance : a survey of small and medium-sized enterprises in Durban
    (2022-02-10) Sithebe, Nompumelelo Precious; Stainbank, Lesley June; Ronald, Chanthal
    The self-assessment tax system has become a popular system in most developing and developed countries. It was introduced in South Africa in 2001 through SARS filing with the aim to improve the level of tax compliance and to increase tax collection by the South African Revenue Service (SARS). This system allows taxpayers to calculate and pay their own taxes without the intervention of tax officials. Appropriate enforcements include levying penalties and interest as provided by the law against non-compliant taxpayers. The study focuses on small and medium-sized enterprises (SMEs) in the Durban area. SMEs are key contributors to tax revenue and eventually to economic growth in South Africa. SMEs also play a critical role in creating job opportunities. This study examines the relationship between tax knowledge and tax compliance in the self-assessment system (SAS). A quantitative research methodology was applied. Questionnaires were issued to the SMEs registered in Durban. Data was collected through a survey resulting in 93 responses. The study found that the majority of the respondents were compliant; however, there is still more work to be done to improve the level of compliance. The use of tax practitioners and improvement in the tax knowledge through training and mentoring programs may assist in improving the level of tax compliance. The results also revealed that most taxpayers have good knowledge on taxpayer responsibilities and value-added tax (VAT) and poor knowledge on turnover tax and payroll taxes. Turnover tax is one of the incentives implemented by government to reduce the tax burden of SMEs. The reason for poor knowledge on turnover tax was that the majority of taxpayers are not aware that turnover tax exists. Poor knowledge on payroll taxes negatively affects the business operations as payroll taxes are withheld by employers from the gross salary to be paid to SARS. This results in an incorrect declaration on the EMP201 and income tax returns which creates unnecessary audits and imposition of penalties by SARS. The use of efiling is still an issue as some of taxpayers prefer to join the queues at a SARS branch to submit their returns instead of using efiling. Tax complexity was found to be a barrier to tax knowledge because of frequent changes to tax laws which requires taxpayers to update their knowledge frequently. It was recommended that to address the barriers to tax knowledge, public awareness campaigns by SARS on the importance of taxation, more use of social media platforms by SARS on the importance of taxation, and the introduction of tax education in secondary schools should be implemented. The study did not find a statistically significant relationships between the components of tax knowledge which were tested and tax compliance. However, it does indicate to tax administrators the relative importance of tax knowledge in assisting with the design of tax education programmes, simplifying tax systems and developing an understanding of taxpayers' behaviour.