DOING GOOD BUSINESS IS GOOD BUSINESS
WHY THE BUSINESSES STILL PLAYING GAMES WITH TAX AND COMPLIANCE ARE RUNNING OUT OF ROAD — AND PAYING FOR IT IN MORE THAN JUST PENALTIES.
Heather Flack, Business Leader, Flair Accounting
I have been in practice for almost 30 years now. Throughout that time I have had the privilege and pleasure of working with business owners who like to do good business. Who know the value and see the benefit of doing things right. I have always said, if you don’t put a skeleton in the cupboard, you don’t have to worry about it jumping out later.
Over the last 12 months, we have had more enquiries than ever from new clients who have been contacted by SARS with notices of audit, flags of undisclosed income, discrepancies in VAT returns, income tax returns, payroll data etc.
These people aren’t criminals; they are just tired. Tired of paperwork, tired of paying provisional tax on time when cash flow is tight, tired of “sorting it out later”. But later has arrived, and it has arrived with SARS’s name on it.
Why This Matters Now
The Evidence Three numbers tell the story. First, that R2.01-trillion collection figure, which SARS itself attributes to seven years of “restoration and stewardship” – a polite way of saying the systems have caught up with the taxpayer. Second, the reach of third-party data: SARS now receives automatic disclosure of South Africans’ offshore assets and income from more than 120 countries, closing the door on the old excuse of “I didn’t know I had to declare that.” Third, the cost of getting caught out isn’t a once-off slap. Administrative non-compliance penalties for individuals run from R250 to R16,000 A MONTH, recurring for up to 35 months, based on your taxable income bracket. Trusts that fail to file now face a similar fixed monthly penalty, automatically imposed for up to 36 months – extended to 47 months if SARS can’t reach you to deliver the notice. This isn’t a fine. It’s a subscription you didn’t sign up for, and it renews itself every month you stay non-compliant. Layer onto that the quieter cost nobody puts in a spreadsheet: the sleep lost wondering if this is the month the letter arrives, the stress of every phone call from an unknown number, the energy spent managing a story instead of managing a business. Compliance has a cost. Non-compliance has a bigger one, and it compounds.
The KZN Angle
Compliance lands hardest in a province where so much SME revenue runs through tenders, ports and big-corporate supply chains. A business chasing municipal or provincial work in eThekwini needs an active Tax Compliance Status PIN and a place on the Central Supplier Database before a bid is even considered – and a single outstanding return, even a nil one, is enough to flip that status. The same goes for firms feeding into Durban’s port logistics chain or bidding into Richards Bay’s industrial corridor: the big players doing the vetting increasingly check supplier tax status as a matter of course, not as an afterthought. In secondary centres like Pietermaritzburg and Newcastle, where relationships still open doors, that goodwill evaporates fast once a supplier is publicly noncompliant. Do things properly, and the doors of finance, tenders and long-term contracts stay open. Cut corners, and they close – quietly, and often permanently. What Good Business Actually Buys You Here’s the part that gets missed in all the talk of penalties and enforcement: compliance isn’t just risk management; it’s a growth strategy. A business with a clean TCS PIN, accurate payroll and up-to-date returns can say yes to the tender, the funding round, the bank facility, the acquisition due diligence, the big client’s vendor onboarding – on the day it’s asked, not six months later once the mess is cleaned up. In a market where speed wins contracts, that readiness is worth more than the tax it costs to maintain it.
Where Accountants Come In
We need to be honest about our own role in this. For too long, some accountants have quietly enabled the “fly under the radar” approach – turning a blind eye, filing the bare minimum, keeping a client happy rather than keeping them compliant. That has to stop. Accountants aren’t just tax filers; we’re meant to be the people standing between a business owner and a decision they’ll regret in eighteen months. That means having the harder conversation, and sometimes it means having the courage to walk away from a client who wants to keep operating in the grey.
Doing good business really is good business. Not as a slogan – as a strategy. The businesses that will still be standing, still bidding, and still sleeping at night in five years’ time are the ones getting this right today.
T: +27 (0)31 207 1572
M: +27 (0)76 555 7529
E: heather@flairaccounting.co.za
