Nexus of Tax Law and Non-Profit Organizations: Incentives and challenges in compliance with tax laws by Public Benefit Organizations in South Africa: a scoping review

Nompilo Sithole, Masibulele Phesa and Mabutho Sibanda
Additional contact information
Nompilo Sithole: School of Accounting, Economics and Finance; University of Kwazulu-Natal, Durban, Westville
Masibulele Phesa: School of Accounting, Economics and Finance; University of Kwazulu-Natal, Durban, Westville
Mabutho Sibanda: School of Accounting, Economics and Finance; University of Kwazulu-Natal, Durban, Westville

International Journal of Business Ecosystem & Strategy (2687-2293), 2024, vol. 6, issue 6, 225-242

Abstract: This study examines the tax incentives and challenges faced by Non-Profit Organisations (NPOs) in South Africa, with a focus on those registered as Public Benefit Organisations (PBOs). NPOs play a vital role in addressing socio-economic issues, and serving vulnerable communities. While these organizations operate for non-profit purposes, the tax incentives provided by the government are crucial for their financial sustainability. Therefore, establishing a supportive tax framework is essential to promote their growth and operational capacity. A scoping review methodology was employed, analyzing literature on tax incentives and compliance challenges faced by South African NPOs from 2010 to 2023. Key provisions include income tax exemptions under Section 10(1)(cN), capital gains tax exclusions, and Section 18A tax-deductible donations. The study also explored the legal framework governing tax-exempt status and trading activities. Findings show that while tax incentives provide significant benefits, NPOs face challenges in maintaining compliance, such as complex regulations, limited financial resources, and a lack of expertise. Many struggle with differentiating between exempt and taxable activities. Strategies to address these issues include simplifying tax processes, enhancing financial management education, and improving communication between SARS and NPOs. Introducing user-friendly tax reporting systems and tailored support could further boost compliance and ensure NPOs maximize available benefits. These insights are valuable for policymakers and tax authorities seeking to strengthen the regulatory framework and support the growth of NPOs in South Africa.

Keywords: Non-Profit Organisation; Public Benefit Organisation; Tax incentives; Tax Challenges (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bussecon.com/ojs/index.php/ijbes/article/view/667/388 (application/pdf)
https://doi.org/10.36096/ijbes.v6i6.667 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adi:ijbess:v:6:y:2024:i:6:p:225-242

Access Statistics for this article

International Journal of Business Ecosystem & Strategy (2687-2293) is currently edited by Umit Hacioglu

More articles in International Journal of Business Ecosystem & Strategy (2687-2293) from Bussecon International Academy Bussecon International Academy, School of Business, IHU, Ordu cad. F-05 Blok No 3, 34480 Basaksehir, Istanbul, Turkey. Contact information at EDIRC.
Bibliographic data for series maintained by Umit Hacioglu ().