By Phumza Macanda

The first phase of small business tax amnesty announced by Finance Minister Trevor Manuel in February has been extended to all small businesses and not just taxi owners.

But some say the government needs to engage small business organisations, to clearly define who should be paying this tax.

The first phase will take effect from August until May next year.

"We really need to revisit and redefine what we mean by small or microbusinesses, because there's clearly a confusion about it. It is glibly referred to as the second economy, but it needs to be clear who is referred to here," said Thami Skenjane, president of the South African National Co-operation Council (SANCC).

The tax amnesty provides relief to small businesses who were not registered as taxpayers before March last year, to come clean about their profits without fear of prosecution for years of not paying tax. The South African Revenue Service said the amnesty would be for businesses with a turnover of up to R5 million.

Jackie Arendse, project director of tax at the South African Institute of Chartered Accountants, said the amnesty was for everybody who runs a business.

"There is no minimum turnover stipulated to exempt businesses from the amnesty," Arendse said.

Skenjane said this is problematic because South Africa has a huge undefined informal sector.

"The government needs to engage us in defining what the second economy or informal economy is, so we can all know who is targeted here," said Skenjane.

Arendse said it was difficult to estimate how much money the taxman would get from bringing unregistered small businesses into the formal economy, but SARS said an estimated 4,1 million economically active South Africans do not pay tax.

Sowetan
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