… If we are to create an environment that facilitates the development of SMMEs and which
fosters entrepreneurship, it is essential to (1) analyse the impact of these compliance costs in
SMMEs, and (2) find ways to minimise the taxrelated regulatory burdens on these firms. …
This study draws on local data and global examples to put forth proposals on how the tax-related
regulatory burden on SMMEs may be reduced. In the sections that follow this policy document: …

Regulatory compliance costs impose a deadweight burden on firms and should therefore be
minimised. In achieving this goal, it is necessary to embrace a process of smart regulation,
rather than focus on deregulation. Tax compliance cost is one type of regulatory costs that is
often viewed to have a large negative impact on SMMEs. To gauge the impact of this cost on
small business in South Africa, this document reviews three available studies on the impact
of tax compliance costs on South African SMMEs.