Revenue Administration in Sub-Saharan Africa - International Tax ...

C. Taxation of small and micro-businessIntroductionThis section reviews taxation regimes and administrative arrangements in place in thesurveyed countries to enforce compliance with tax laws across small and microtaxpayers.Survey results (Tables 21 and 22)• All revenue bodies, except Botswana and Mauritius, have implemented aspecialized presumptive taxation regime for small and micro enterprises.• Six revenue bodies (Benin, Burundi, Kenya, Sierra Leone, Senegal and Zambia)have also set up dedicated units responsible for administering the presumptiveregime.• In most countries, incorporated businesses are excluded from the presumptiveregime 98 as these are assumed to have the capacity to prepare and maintainfinancial records, a requirement of the national business registration office.• Defined services (such as professional services) are also excluded from thepresumptive regime in some countries.• In some countries lower 99 and upper thresholds 100 have been established foreligibility under the presumptive regime.• Five countries (Benin, Mauritius, Sierra Leone, Senegal and South Africa) haveestablished a one-stop-business registration process/office that also handlesregistration for tax purposes.• All revenue bodies (except Botswana) require taxpayers in this segment toperiodically file returns and pay taxes, but the filing requirements vary acrosscountries and sub-categories of small and micro businesses (including the selfemployed).101• Information on number of taxpayers and revenue collection by taxpayersegment was scanty and not readily available in most revenue bodies surveyed.However, available information indicates that taxation regimes for small andmicro business and self-employed individuals account for about 3% of totalrevenue collections (Benin - 3.5%, Tanzania - 2.5%, and Zambia - 3%).98 Only South Africa, Rwanda and Zambia have presumptive regimes that are also available to incorporated businessesthat meet the criteria for registration under the presumptive regime.99 Harmonized with the grossed up threshold for PIT.100 Commonly the VAT registration threshold.101 For instance, taxpayers in this segment in Ethiopia, Rwanda and Sierra Leone file returns and pay presumptivetaxes annually, while taxpayers in the rest of the countries (except Zambia) file their returns quarterly. In Zambia,those on turnover tax file and pay their taxes monthly, while those on presumptive tax for public transporters and taxispurchase daily tickets from appointed agents at bus stations and taxi ranks. Most revenue administrations apply asingle fixed rate of between 1 and 4% on gross turnover to determine the tax liability. South Africa and Tanzania havemultiple rates.64