A critical comparison of tax incentives for small, medium and micro enterprises between South Africa and Australia

Abstract

The South African Revenue Service (SARS) introduced tax incentives for the small, medium and micro enterprises (SMMEs) in 2001. These incentives were introduced to assist small business in stimulating economic activity, creating jobs and alleviating poverty. This policy decision is not unique to South Africa. Many other countries offer incentives to small businesses for a variety of reasons, which may differ from country to country. However, it is generally understood that small businesses often face challenges which require the State to intervene in the form of tax incentives. South Africa operates on a global economic platform. It is imperative that its efforts are comparable against those of its counterparts so that it can assess its situation and be able to channel resources in the right direction. This study uses a qualitative systematic literature review to compare the tax incentives offered to SMMEs in South Africa and Australia .Australia has been chosen because it is a developed country and also because it has a mature and simplified legislation. The findings of this study show that South Africa has provided good incentives, particularly in the area of attracting small businesses into the tax base but once these small businesses are in the base, there is nothing to ensure that they grow. On the other hand, Australia has not done much to bring small businesses into the tax base, but it provides good incentives, sufficient to enable business growth for those already in the system. One of the challenges faced by many small businesses is cash flow resources. This study has found that Australia’s tax incentives empower small businesses in the area of cash flow, as compared with the situation in South Africa. Future research studies should investigate the extent to which the respective small businesses are aware of the tax incentives available to them. That is, it must be established how far each country has gone in ensuring that small businesses are familiar with all the incentives at their disposal.

Die Suid-Afrikaanse Inkomstediens (SAID) het belastingaansporings skemas vir die klein, medium en makro-ondernemings (KMMOs) in 2001 ingestel. Hierdie aansporings is ingestel om die klein besighede te help om ekonomiese aktiwiteite te stimuleer, werk te skep, asook om armoede te verlig. Hierdie beleidsbesluit is nie uniek aan Suid-Afrika nie. Menige ander lande bied aansporings aan die klein ondernemings vir ‘n verskeidenheid van redes. Alhoewel hierdie redes kan verskil van land tot land, word dit algemeen verstaan dat klein ondernemings dikwels uitdagings ervaar wat vereis dat die staat ingryp in die vorm van belasting-aansporings. Suid-Afrika werk in ‘n wêreldwye ekonomiese platform. Dit is noodsaaklik dat Suid-Afrika se pogings met die van sy eweknieë vergelyk word om sodoende die huidige situasie te evalueer en in staat te wees om hulpbronne in die regte areas beskikbaar te stel. Hierdie studie maak gebruik van ‘n kwalitatiewe sistematiese literatuur oorsig om die belastingaansporings in beide Suid-Afrika en Australië vir KMMO’s te vergelyk. Australië is gekies weens die feit dat dit ‘n ontwikkelde land is en ook omdat dit oor goed ontwikkelde en eenvoudige wetgewing beskik. Die bevindinge van hierdie studie toon dat Suid-Afrika goeie belastingaansporings het, veral op die gebied om die klein ondernemings in die belastingbasis in te trek, maar wanneer hierdie klein ondernemings in die basis is, is daar niks in plek om te verseker dat hulle verder groei nie. Aan die ander kant, het Australië nie veel gedoen om klein besighede in die belastingbasis belastingbasis in te bring nie, maar Australië bied goeie voordele wat tot besigheidsgroei lei vir diegene wat reeds in die belastingsbasis ingeskakel is. Een van die uitdagings van baie klein besighede is kontantvloeibronne. Hierdie studie het bevind dat, Australië se belastingaansporings, die klein ondernemings se kontantvloei bevorder in teenstelling met die posisie in Suid-Afrika. Toekomstige Toekomstige navorsingstudies moet die mate waartoe die onderskeie klein ondernemings bewus is van die belastingaansporingsskemas wat beskikbaar is, ondersoek. Dit wil sê, daar moet vasgestel word hoe ver elke land gegaan het om te verseker dat kleinondernemings vertroud is met al die moontlikhede tot hulle beskikking.