Levies that may apply to an SME
Provided by Business Partners Ltd, South Africa's leading investor in SMEs
Other than the taxes that apply to small businesses, there may also be levies you have to pay, depending on the type of establishment you are running. It's important to keep abreast of these to ensure you are up to date with any fees payable.
Here are some of the levies you could be liable for.
Registration as an Exporter
Any person who intends exporting goods from South Africa must register with SARS as an exporter. Exporters who export non-commercial goods, of which the value for each consignment is less than R20 000, provided that this is limited to three exportations per calendar year, are excluded from registration.
Skills Development Levy (SDL)
An employer must pay SDL if the employer pays annual salaries, wages and other remuneration in excess of R500 000. Employers with an annual payroll of R500 000 or less (whether registered for employees tax purposes with SARS or not) are exempt from this levy.
This levy (currently 1%) is used for the funding of education and training of employees. It is calculated as a percentage of a leviable amount, which is more or less equal to the earnings of the employees.
The application form to register for SDL is the same form that is used to register for employees' tax (EMP101). The monthly return for SDL is combined with the monthly return for employees' tax, which means that the same terms and conditions apply.
An environmental levy is charged on certain plastic carrier bags and grocery bags at a rate of 3 cents per bag. Plastic bags used for immediate wrapping/packaging, refuse bags and refuse bin liners are excluded from paying this levy.
Apart from the payment of this specific Environmental Levy per quarterly excise account, VAT is also levied on these bags, calculated on a value that includes the amount of the levy.
Manufacturers of such bags must license their premises as manufacturing warehouses with the local Controller of Customs and Excise and submit quarterly excise accounts to such Controller.
Regional Service Council registration
With the exception of specialised enterprises, such as liquor stores and arms dealers, businesses no longer need a license to trade in South Africa. They are, however, required to register with the Regional Services Council (RSC) in the area in which they operate.
Once registered, the business is charged services levies based on its total bill for salaries and wages, as well as on gross sales. Returns and payments must be lodged on a monthly or annual basis as determined by the RSC.
To register with your local RSC:
- Complete and submit Form RSC1 at the offices of your local Regional Service Council. These vary from council to council, so can't be made available for download online
- You will receive confirmation of registration within approximately one month on a Form RSC2. This form will contain a reference number which should be quoted in all dealings with the RSC
- Subject to prescribed payment terms, the RSC will send you a services account on Form RSC4 either monthly or annually
If you own a legally registered company, you have to pay the RSC levy, even if you don't employ any full-time staff. Late payments attract penalties and interest charges.
For more details, registration/application forms or any amendments made to these levies, visit the SARS website.
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