There is no doubt that compliance plays a significant role in every entity. For smooth operation and other advantages that comes with it.
Compliance will help your company avoid legal risks. Lawsuits and settlements can easily cost you millions of rands. Fines and other compensatory payments can also add up.
Even if you are able to pay these costs, you might see your sales drop dramatically. Some tenders or job applications require that you comply before they approve your application. The banks, funding institutions, etc.
Damage to your company’s reputation can take years to repair. It’s impossible to estimate just how much monetary damage it can do. It’s better to practice compliance and avoid a breach altogether.
Do not seek short cuts to Compliance.
Please be in the know what makes a business to comply. In this case we refer to Tax compliance. As a business owner make it your primary duty to understand what it takes for a business to be Tax compliant.
I mean, you cannot just comply automatically especially if the business is in operation. To be Tax compliant you need to have financial statements for the business prepared so you can submit your tax return. I am referring to Income Tax here. After submission, if the business was profitable, you will have the tax calculated then pay the funds to the receiver of revenue – SARS. Once the payment is allocated against your business tax account then your status will become compliant.
When you are a VAT registered vendor, you are expected to submit the VAT returns every two months.
If you have other statutory taxes registered such as PAYE, UIF, etc you are expected to file their returns every month, before the 7th of every month.
I am writing this blog in hope to caution you against the religious force of compliance without following all the necessary steps. Such as capturing the transactions, preparing the reports and having them ready for submission to the taxman. First and foremost prior to the submissions as the business owner you need to make sure that you approve all that has been prepared for the business so you can understand your business position and performance. This will make you understand why you are paying the figure that you are paying.
Force compliance can be in the form where your tax returns are submitted but as zero returns. Which means you are saying the business is dormant. This cannot be the case if there is movement of funds in the business bank account.
If you need a consultation with us with regards to your business, any type of business – please reach out to us at PA@matsobanemetja.co.za
Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd
For more information: enquiries@matsobanemetja.co.za
If you think compliance is expensive, try non-compliance
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Matsobanemetja Business Consulting Pty Ltd 