An analysis of the turnover tax relief available to micro-enterprises in the North West Province
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One tax relief measure implemented by SARS is the turnover tax relief system applicable to selected SMMEs in South Africa. These selected SMMEs are defined as Micro enterprises. As part of the South African government’s strategy for accelerated growth, the DTI and the National Treasury are increasingly targeting the SMME sector of the economy, determining how to increase their efficiency and enabling them to grow. One of the government institutions of South Africa, tasked by the Finance Minister and the National Treasury to assist the government in achieving this growth, is the South African Revenue Service (SARS) who introduced the turnover tax system into the Act. This study aimed to determine whether the turnover tax relief system is utilised by the SMMEs in the North West Province as anticipated by the South African government. The government of South Africa introduced this system to assist SMMEs in reducing their tax compliance costs, anticipating that this will free up SMMEs to grow and further the economy. The last mentioned fact notes what the anticipation of government was when they introduced this system. An inductive, exploratory and qualitative research method was used in this study where questionnaires were provided to SMME business owners as an introduction into their perceptions and knowledge of the turnover tax system, followed by interviews to obtain additional qualitative information. The qualitative data that was obtained provided evidence that SMMEs in the North West Province were not applying the turnover tax relief system and are therefore not benefitting from the National Treasury's incentive towards them. The reasons as to why these enterprises are not utilising the turnover tax system, was also discussed in this study.