Turnover Tax is dangerous for small business

People filing tax forms in 1920

DON’T BE FOOLED!

Warning: New Turnover Tax from SARS could be SARS’s way of ripping you off!

Remember the saying: When it sounds too good to be true, it probably is!

Why would SARS offer you a New Tax System if they were going to make less money?

Of course they are going to make more money out of Turnover Tax!

And this is how they are going to do it:

They are going to try convince thousands of young small businesses to give up their virtual NO TAX status for one in which they could be liable to pay up to R38 000 EXTRA TAX EACH YEAR!

The only reason SARS can give is that you may need to fill in 7 or so less TAX FORMS!

But who cares?

For R38 000 I’ll fill in 20 extra tax forms!

Example:

Current system:

Small CC business turning over R999 999 per year

has no profit after expenses and member draws salary of R200 000 and pays R33 430 on salary

R33 430 is the ONLY TAX this business pays

Turnover Tax system:

Small CC business turning over R999 999 per year

has no profit after expenses and member draws salary of R200 000 and pays R33 430 on salary

R33 430 PLUS R37 930 TURNOVER TAX =

R71 360 is the TOTAL TAX this business pays!!

Now please, where is the benefit in that?

Turnover Tax is a SCAM – A scam from the heart of government, trying to rob the struggling, poor man in the street and having the cheek to ask him to thank them for it!!

Our advice: Don’t touch turnover tax with a barge pole.

Government should be sent away ashamed of itself for such brazen greed and deception with its tail between its legs, to go think up some other scam to throw at the rich for a change…

Small businesspeople are going to have to do their calculations VERY carefully before jumping into the turnover tax system boots and all!

Comment: info@turnovertax.co.za

via Turnover Tax is dangerous for small business

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4 thoughts on “Turnover Tax is dangerous for small business

  1. Pingback: SARS Scam – don’t pay SARS to quick | Fixed Accounting

  2. Pingback: Turnover Tax is dangerous for small business | Fixed Accounting | Personal Finance Guide

  3. RE: TURNOVER TAX

    It is first of all a voluntary registration. There is no onus to register. In this regard a good tax practitioner should be consulted.

    Secondly: If your profit margins are exceptional, the opposite is true. You will save tax the more positive your ratios are and the more profitable your business is.

    Thirdly: The cost saving due to less complicated record keeping (Vat) and easier administration of tax affairs (CGT, STC limited to R200 000), must be set off against an increase (if any) in taxation payable.

    It is there fore very harsh to come out so strongly against Turnover Tax.
    A well established company with high profit margins can gain as much as a newly formed, low profit company can loose.
    Ask your local tax practitioner to assist you in calculating whether it would be in your interest to register for turn over tax or an SBC.

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