The Davis Tax Committee (DTC), which was set up by the South African Ministry of Finance in July 2013 to make recommendations for possible tax reforms, has released an updated interim report for public comment covering the following issues regarding the taxation of small and medium-sized enterprises (SMEs);

  • The role of SMEs in the economy;
  • The definition of a small business;
  • Challenges facing SMEs, especially the tax compliance burden;
  • A review of income tax incentives for ‘small business corporations’;
  • A review of the income tax incentive for ‘venture capital companies’ to fund small businesses;
  • A review of the alternative presumptive turnover tax system for ‘micro businesses’;
  • A review of the Value-Added Tax requirements for SMEs;
  • The impact of the new Employment Tax Incentive on SMEs.

The Ministry had already accepted the DTC’s recommendations. The closing date for comments on the updated report is August 31, 2014.