SARS ’ available tax incentives to boost Small and Medium-Sized Enterprises
SARS ’ available tax incentives to boost Small and Medium-Sized Enterprises
The South African Revenue Service ( SARS ) provides a series of tax incentives and relief measures for small to medium-sized enterprises ( SMMEs ) to support their growth and sustainability . These measures are designed to reduce the financial burden on SMMEs and promote economic development , job creation , and investment .
Speaking in an interview , Morné Janse van Rensburg , Managing Director of tax specialist firm , Hobbs Sinclair Advisory , highlighted the importance of these incentives for small businesses , emphasising the need for their adoption . " Surprisingly , many business owners are not aware of all the tax incentives available to them or do not put in the minor effort to make use of them . What may seem like a laborious exercise can be well worth it ," he stated . " It is often beneficial to reach out for professional assistance , which can pay for itself tenfold through the tax savings made ."
Key Tax Incentives for 2025 : Small Business Corporation ( SBC ) Tax Rates Small Business Corporations ( SBCs ) will benefit from no income tax on the first R95 , 750 of taxable income , with progressive tax rates applied to income above this threshold . This offers a significant reduction in the overall tax burden compared to standard corporate tax rates .
Turnover Tax Turnover Tax is a simplified tax system only available to sole proprietors , partnerships , companies , or close corporations with a “ qualifying turnover ” of less than R1m per year . These types of entities are called micro businesses . Turnover Tax is calculated against the turnover of a business , as opposed to a percentage of profit which reduces the administration burden on business owners as there is less of a need to keep a detailed record of expenses and to work out or construct which are deductible for tax purposes . Registered Turnover Taxpayers are also exempt from Dividend Withholding Tax ( DWT ) on dividend distributions of up to R200 000 per year . Dividends in excess of R200 000 are subject to DWT at the standard rate of 20 %.