In Conversation With Lehlogonolo Muthevhuli- Manager Advocacy and Communications (SMART)
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South Africa’s informal economy is once again in the spotlight after the Social Movement for Advocacy, Rights and Transformation (SMART) called on the South African Revenue Service (SARS) to launch a comprehensive tax compliance campaign targeting non-compliant spaza shops.
The call follows the Public Protector’s report into the regulation of spaza shops, which identified weaknesses in the regulation of parts of the informal retail sector, including concerns around business licensing, municipal compliance, immigration documentation and tax registration.
SMART argues that while much of the public debate has focused on immigration and law enforcement, an equally important issue is whether businesses operating in South Africa—regardless of who owns them—are complying with tax laws.
The organisation says that every qualifying business benefiting from South Africa’s economy, infrastructure and public services should contribute to the fiscus through lawful tax compliance. It believes improved cooperation between SARS, Home Affairs, municipalities, the Companies and Intellectual Property Commission (CIPC) and law enforcement could help identify businesses operating outside the legal framework.
However, the issue is more complex than tax collection alone.
South Africa’s informal economy plays a vital role in creating livelihoods and improving food access, particularly in townships and underserved communities. Many small businesses operate informally because of administrative barriers, limited financial literacy, or the costs associated with formal registration. At the same time, compliant businesses often argue they are placed at a competitive disadvantage when others avoid taxes, licensing requirements and regulatory obligations.
The call follows the Public Protector’s report into the regulation of spaza shops, which identified weaknesses in the regulation of parts of the informal retail sector, including concerns around business licensing, municipal compliance, immigration documentation and tax registration.
SMART argues that while much of the public debate has focused on immigration and law enforcement, an equally important issue is whether businesses operating in South Africa—regardless of who owns them—are complying with tax laws.
The organisation says that every qualifying business benefiting from South Africa’s economy, infrastructure and public services should contribute to the fiscus through lawful tax compliance. It believes improved cooperation between SARS, Home Affairs, municipalities, the Companies and Intellectual Property Commission (CIPC) and law enforcement could help identify businesses operating outside the legal framework.
However, the issue is more complex than tax collection alone.
South Africa’s informal economy plays a vital role in creating livelihoods and improving food access, particularly in townships and underserved communities. Many small businesses operate informally because of administrative barriers, limited financial literacy, or the costs associated with formal registration. At the same time, compliant businesses often argue they are placed at a competitive disadvantage when others avoid taxes, licensing requirements and regulatory obligations.
