Prestigious medal for the best paper

Posted on April 18, 2012

The title of the paper was “Tax compliance costs for the small business sector in South Africa – establishing a baseline.”

The research formed part of an international research project across four countries – Australia, Canada, South Africa and the UK – which evaluated and compared tax compliance costs affecting the small business sector. Sharon Smulders was responsible for the South African leg of this project, which involved an empirical study with the primary objective of measuring the tax compliance costs of small businesses in South Africa, thereby establishing a baseline against which future studies and enhancements to the tax system could be measured.

The study also differentiated tax compliance activities from core accounting activities in order to identify the managerial benefits of tax compliance. It also investigated whether various South African small business tax concessions are perceived to be achieving their objective of relieving the tax compliance burden.

The results of this study were presented to SARS. It was indicated at this presentation that the research would assist SARS in comparing tax compliance costs before and after the implementation of specific tax reforms. This comparison could also serve as a basis for a measure of SARS' performance in bringing down the costs incurred by small businesses whilst dealing with SARS. The international collaboration will further assist SARS and the small business interest groups to benchmark themselves against other countries and learn from their successes and pitfalls where appropriate.

The international collaborative status of the research will strengthen the Department of Taxation’s and also the University of Pretoria's research outputs and international profiles. It will also strengthen the University’s impact on economic and social development, as the research was commissioned by SARS and is being used by them at the top levels where appropriate reforms and decisions can be taken to alleviate the burden for the small business sector in South Africa, a sector which is of vital importance in creating employment – the single all encompassing objective of the South African government's "New Growth Path".

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