South Africa Turnover Tax

South Africa has this thing called Turnover Tax where businesses that earn under R1 million per year can pay tax in a simplified structure based on their turnover instead of profit.

This is designed to help small businesses, primarily by being simpler to calculate.

If you happen to operate a business with high margins, the back-of-the-envelope figures make this look very attractive compared to paying income and corporate tax.

Becauase of this, SARS excludes personal and professional service providers and a few other categories.

Here’s a good summary:

Will I actually benefit? It depends. Taxpayers who make a big margin on sales and have low overheads will benefit. The problem is that most taxpayers who fall into this category are in the service industry and personal service providers are specifically excluded. - ThriveCFO

So probably, it’s useless to you and you should remember don’t obsess over tax and go and focus on revenue generation instead.