Here are four tax tips for SME owners in SA

Many small and medium enterprise (SME) owners are forced to juggle multiple responsibilities to keep the business afloat, including being a tax practitioner.

Some entrepreneurs usually make mistakes when it comes to paying their companies’ first provisional tax charge for the financial year.

Nicole Swart, Managing Director at Merchant Capital, says business owners must not only check the calculations provided by SA Revenue Service but also pay what they owe.

“Failure to do so will incur penalties and interest charges that will, in turn, make the following tax deadline an even bigger obstacle.”

Plan for tax season

She adds that if business owners have not made monthly allowances for their provisional tax payments, finding the lump sum can seriously damage their bottom line or prompt them to look for short-term funding solutions.

Swart advises that proactive planning, the right advice and support, and a clear understanding of tax requirements will help entrepreneurs prepare for their tax responsibilities.

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Four tax tips for SME owners

She gives four tips for SME owners who want to make the 2026 tax season as stress-free as possible:

Work with a tax expert to understand what you may be liable for and when payments are due

Swart says the different types of tax are all based on different factors and have different due dates.

“As a quick guide, provisional tax is payable in February and August and is levied on companies that do not have PAYE [pay-as-you-earn] deducted monthly from employees’ salaries; PAYE is, however, a compulsory tax for all companies with employees.

“Companies whose annual turnover exceeds R1 million must pay VAT [value-added tax] on their sales, but some can be claimed against business expenses.”

Swart adds that all SMEs must pay income tax, levied at a flat rate of 28% unless they qualify as small business corporations or they earn less than R1 million annually, in which case their rate is lower.

Additionally, SMEs that earn less than R1 million annually can opt to pay turnover tax, a simplified system that replaces all other taxes except PAYE.

2. Keep accurate financial records throughout the year

She says investing in cloud-based accounting software or keeping an accountant on retainer to manage the required financial records, receipts, invoices, and previous tax filings is important.

Incomplete or disorganised records can make tax season challenging and increase the risk of audits, penalties, and disputes.

3. Take advantage of tax deductions, allowances, and incentives

“It is worth consulting a professional accountant to identify any tax-saving opportunities, from claiming for business expenses like rent, utilities, marketing, and salaries, to applying for breaks afforded to SMEs that do research and development,” says Swart.

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4. Plan your cash flow in advance and automate payments

Another tip she gives is to exercise financial discipline by putting money aside every month, in a separate account if necessary, so that you have a reserve to draw from when tax becomes payable.

“Automating these monthly payments into your savings account, as well as payments from that account to Sars [ South African Revenue Servic] in the months when tax is due, means that you are less likely to incur penalties.

“If tax season is putting a strain on your SME’s cash flow, a cash advance can help tide you over.”

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