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Tax relief initiatives have been introduced by the South African government in order to assist small business to grow and become sustainable. The high failure rate of businesses coupled with the alarmingly high rate of unemployment in the country is the main reason the government embarked on these initiatives and strategies. The different tax initiatives available to qualifying small businesses include small business corporation tax and turnover tax. The research has been undertaken to determine if small business tax initiatives introduced by SARS are effective and are being utilised by small businesses. A questionnaire was sent to eighty five small business owners to determine if they are aware of small business tax and turnover tax and also to determine if they are utilising these initiatives. The findings from this study reveal that approximately half of the respondents do not know about these specific tax initiatives. Only a small percentage of small business are eligible for small business tax and none of the respondents in the sample are eligible for turnover tax. The majority of small business owners agree and strongly agree that the initiatives introduced by the government are ineffective and need to be revised. [ABSTRACT FROM AUTHOR]

Small and medium enterprises play an important role for South Africa. They serve as a vehicle in creating jobs for local communities. KwaZulu Natal is the second largest province in the country and the necessity of developing sustainable small and medium businesses cannot be overemphasized. The South African government has identified and prioritized the development of small businesses as one of their strategic objectives. Despite the importance of these businesses for the country and province, there are many challenges that these businesses face. One of the most onerous and time-consuming challenges is ensuring tax compliance. Tax compliance is defined as the preparation, submission and payment of taxes due within the specified time periods. In order to achieve the objectives set out by government, it is necessary that the tax systems for small businesses be efficient and simplified in order to meet the needs of the sector.The research has been undertaken to firstly determine which taxes are most complex for SMEs and secondly to determine which factors and costs are most significant in ensuring tax compliance. A questionnaire was sent to eighty five small business owners to determine which taxes are most complex and what challenges and costs are most excessive. The findings from this study reveal that VAT is the most complex tax for small businesses in South Africa. Compliance with VAT is the most costly and challenging and the time spent on compliance by owners is perceived to be the most excessive cost incurred in ensuring tax compliance. [ABSTRACT FROM AUTHOR]