SARS & Compliance
Turnover Tax in South Africa: Questions to Ask Your Tax Practitioner
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- FinReady SA
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- Last updated:
- Reading time
- 3 min read
The short answer
Turnover tax is a simplified SARS tax system for qualifying micro businesses below a set annual turnover limit. Instead of income tax on profit, eligible businesses pay a low rate on turnover. Whether it suits you depends on your business type and figures, so check SARS's current limits on sars.gov.za and discuss it with a registered tax practitioner. This page is general information, not tax advice.
On this page
How turnover tax works
Under turnover tax, a qualifying micro business pays tax based on its turnover using a sliding scale set by SARS, rather than income tax on profit. It can replace several taxes, which reduces admin. Some business types and income sources are excluded, and the turnover limit and rates are set and updated by SARS.
Questions to ask your tax practitioner
- Is my business type allowed to register for turnover tax?
- Is my annual turnover under SARS's current limit?
- Would turnover tax or normal income tax cost less for me, given my margins?
- How does it interact with VAT if I am, or need to be, VAT registered?
- What records do I still need to keep?
- When could I register, and when would I have to leave the system?
Key takeaway
Low-margin businesses can sometimes pay more under a turnover-based tax than on profit. Run the numbers with a practitioner before choosing.
Records to keep either way
SARS generally expects business records to be kept for five years. Bank statements, invoices and receipts are the core. Categorised bank statement data and monthly management accounts make that conversation quicker.
Frequently asked questions
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