Tax Compliance in 2025: Help Is at Hand
“Being tax compliant and ‘paying your fair share’ is not just good for you, but also contributes to the positive growth of our country’s economy which in turn benefits all South Africans.” (SARS)
Being tax-compliant is a legal requirement for all South Africans.
SARS says it will be unrelenting in driving voluntary compliance in pursuing the 2024/25 tax revenue target of R1,840.8 billion.
To expand the tax base, detect dishonest taxpayers, deal with tax avoidance, expand debt collection, and improve service levels, SARS will:
- Deploy more data science and artificial intelligence (AI).
- Broaden the tax base via third-party data sources (banks, medical schemes, fund administrators etc.
- Use predictive modelling to ensure all taxpayers and traders are registered, filing returns and paying dues.
- Build detection capability using machine learning models and AI.
- Enforce Customs and Excise trade laws against the illicit economy.
- Focus on dispute prevention and resolution.
Importantly, SARS is ready to act against those who willfully and defiantly ignore their legal obligations by misrepresenting their true economic status. SARS will impose significant legal and administrative costs on taxpayers and traders who deliberately fail to meet their obligations.
What does tax compliance look like?
Your company needs to:
- Be registered with SARS for all the tax types applicable to your company.
- Have either merged or declared all registered tax reference numbers on eFiling.
- Timeously submit all tax returns and other documentation requested.
- Keep all registered particulars updated.
- Pay all tax debt on time, or timeously secure a payment arrangement or suspension of payment.
- Deregister the business if it is liquidated or closed.
Remember that your tax compliance status is not static: it changes according to your continued compliance with tax requirements month after month. Also remember that SARS can impose both monetary and criminal sanctions to enforce compliance. This is a significant business risk, because the burden of proof, should a taxpayer disagree with a decision taken by SARS, lies with the taxpayer. In the event that the taxpayer fails to argue their case successfully, they may find themselves in a position where penalties are suffered even if the error was unintentional or administrative in nature.
Benefit from the advantages of tax compliance
When you comply with your tax obligations, you give your business some compelling advantages.
- Eliminate the costs of non-compliance, like penalties, interest, and additional accounting and admin fees.
- Avoid the risk of criminal offences, which may result in a fine, imprisonment or both. Common offences include not registering for a tax type, or simply not submitting tax returns.
- Proof of tax compliance is considered an indicator of good company management and legal good standing.
- Good standing tax clearance certificates are often required for tender applications, bidding processes or prequalification as a supplier. They can also be needed to receive payment, or for foreign investment allowances.
- Compliance enables companies to gain the confidence of clients, stakeholders and investors; take advantage of business opportunities; and prevent reputational damage.
3 Things You Have to Do to Position Your Business for Growth in 2025
“There are no secrets to success. It is the result of preparation, hard work and learning from failure.” (Colin Powell, United States Secretary of State)
Of course you plan for your business to grow. But in an environment of constant change, it can be hard to know where to place your energy. These three focus areas will help you position your business for growth, regardless of the external circumstances.
- Clean up your finances
A business that’s ready for growth is one that understands its finances. How much money can you afford to spend on advertising? What investments need to be made to maintain infrastructure or hire the right staff? And can you afford to keep going if there’s a disruption in your supply lines? Businesses with tidy finances are able to answer all of these questions and more.
If you can’t answer every conceivable question about your finances, then you need to ask your accountant (that’s us) to help you get them in order. Here are a few pointers:
- Separate business and personal finances
Business finances that are intermingled with personal ones create confusion and make it difficult to get a clear picture of just where the business is headed.
- Introduce bookkeeping software
You may not have the time to stay on top of your finances when you’re running the business – but that’s okay. Using bookkeeping software can keep you one step ahead of the game, and it will definitely save your accountant time.
- Regularly update your financial statements
Ask us to keep a set of financial statements up-to-date and on hand at all times. Financial statements can open doors, allowing you to get necessary funding, apply for awards or government incentive programs and/or build an accurate business strategy.
- Separate business and personal finances
- Optimise your client base
Improving company finances doesn’t have to mean introducing new products or expanding into new territories. It’s far simpler to maximise the benefit you’re getting from your current market. Do this by ensuring your sales and marketing teams are functioning at the best possible level, getting the right information to your clients, and then maximising the impact they have on those clients.
Focus on building genuine relationships with your customers by engaging with them and their needs, providing top-level service and offering value beyond the sale. If you truly care for your customers they will care for you, and you will find yourself at the front of the queue when it comes to new market information and advice on how your product could be improved. Your sales team should also be encouraged to follow up with potential new clients to ensure opportunities aren’t being missed.
- Analyse your existing offering
Growth can also be generated by making sure you’re offering the products your clients need at the right price. It’s no good pouring money into a product that’s not right, or which isn’t as good as its competitors. The first step to finding out if you’re on the right track is to ask yourself the question, “If we stopped operating today, would anyone miss us?” If the answer isn’t a resounding yes, then you need to immediately investigate what changes need to be made.
Do you need to bring on new products to fill the missing gaps in your offering? Is there an essential thing that your product could be doing better? If you aren’t continually striving to deliver the best product in the perfect price range, then you’re probably falling behind.
The bottom line
A company is like the human body. It needs to be perfectly optimised to run at its best level. Making the changes to improve your business health today will pay off in the long run.
Your Tax Deadlines for December 2024
- 06 December – Monthly Pay-As-You-Earn (PAYE) submissions and payments
- 24 December – Value-Added Tax (VAT) manual submissions and payments
- 30 December – Excise Duty payments
- 31 December – Corporate Income Tax (CIT) Provisional Tax payments
- 31 December – End of the 3rd fiscal quarter
- 31 December – Value-Added Tax (VAT) electronic submissions and payments
