Small, medium and micro enterprises (SMMEs) play a key role in the development of the
economy and are a significant contributor to employment. In South Africa (SA), SMMEs
employ more than 68.2% of the work force in the private sector. To achieve the objective of
economic growth, job creation as well as income redistribution, the government is actively
promoting SMMEs. The SMMEs increase the average employment rate in SA by pulling into
production unemployed low skilled labour, whose skills level is not sufficient to qualify for
employment in larger firms. How do the South African tax compliance burden and tax
incentives for SMMEs measure up in comparison to the tax compliance burden and tax
incentives for SMMEs in the United Kingdom (UK) and the United States of America (USA)?
The research reviews the tax compliance burden and tax incentives of SMMEs in SA in
comparison to the tax compliance burden and tax incentives of the UK and the USA. The
research was conducted through an extensive review of the literature. The literature review
has indicated that tax compliance is one of the main burdens acting as a deterrent to the
formalization of SMMEs for tax purposes. The review of the literature also indicated that
National Treasury is trying very hard to ease the burden of tax compliance on SMMEs