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Tax compliance costs for small business in South Africa, web-survey of tax practitioners : provincial data analysis (English)

At the request of the National Treasury and the South African Revenue Service (SARS), the Foreign Investment Advisory Service (FIAS, a multi-donor facility of the World Bank Group) provided assistance with a set of surveys of tax compliance costs for small and medium enterprises. This paper is based on the results of the first of these surveys a web-based survey of tax practitioners and focuses on the differences between the nine provinces in South Africa. While there was comparatively little variation in the tax practitioner survey by turnover band (confirming the regressive nature of tax compliance costs in South Africa), there appears to be a lot of provincial variation not only in 'costs' (where the more urbanized provinces tended, as expected, to be more expensive than other provinces), but also considerably in time indicators. It appears that some SARS provincial offices are more efficient than others, and this varies by tax and by procedure. The rural provinces were often rate relatively well with regard to communications with tax practitioners (perhaps because they have a less onerous case-load), while on the other hand, tax practitioners report a higher frequency of SARS errors in the rural provinces. There may be considerable scope for identifying 'best practice' among provinces for various tax services and attempting to analyze and disseminate the key features of their good performance. Further, the lessons of South Africa may be useful for many other developing countries that are interested in mitigating tax compliance costs for small and medium enterprises (SMEs).

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Citation

Coolidge, Jacqueline Ilic, Domagoj Kisunko, Gregory

Tax compliance costs for small business in South Africa, web-survey of tax practitioners : provincial data analysis (English). Africa region working paper series ; no. 119 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/676561468305681745/Tax-compliance-costs-for-small-business-in-South-Africa-web-survey-of-tax-practitioners-provincial-data-analysis