Tax Policy and SME Compliance in South Africa: Insight from Tax Practitioners

Lungisani Lucky Buthelezi and Masibulele Phesa ()
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Lungisani Lucky Buthelezi: College of Law and Management Studies, School of Commerce, University of KwaZulu-Natal, Westville, Durban 4041, South Africa
Masibulele Phesa: College of Law and Management Studies, School of Commerce, University of KwaZulu-Natal, Westville, Durban 4041, South Africa

JRFM, 2025, vol. 18, issue 11, 1-23

Abstract: Tax practitioners (such as accountants and bookkeepers) are important enablers of tax compliance. Taxpayers, particularly small businesses, look to tax practitioners for expert advice because of increasingly complex tax legislation. This study’s purpose was to examine tax practitioners’ perspectives on tax policy and SME compliance in South Africa. This study looks at the perspective of tax practitioners to extend information on tax policy and its effect on the tax compliance of SMEs. A total of 90% of companies in South Africa are classified as SMEs, which account for more than 80% of employment in the economy. Despite the importance of the SME sector in job creation, tax policies and the costs associated with them are major issues affecting the overall regulatory environment and they are identified as a major threat to SMEs’ growth. This study seeks to close this gap by examining practitioners’ perspectives on tax policy and SME compliance in South Africa. This study adopted a quantitative approach using a self-administered questionnaire which was emailed to a sample of 255 tax practitioners by using a link through QuestionPro, and this study applied descriptive statistics in analysing data. This study indicated that tax practitioners have sufficient experience and qualifications to prepare and handle tax matters for SMEs. This study demonstrated that SMEs register for taxes, file annual returns, and pay tax liability within the period stipulated by tax law. It further indicated that being tax-compliant has certain benefits for SMEs. This research is intended to assist tax authorities and the government in better creating measures to address the problem of tax compliance among SMEs in South Africa. This article adds to the body of knowledge because it uses the opinion of tax practitioners to extend debate on tax policy in tax compliance and its effect on the functioning of SMEs.

Keywords: small businesses; SME taxation; tax practitioners; tax policy (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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