Benefit, if any, in registering for Turnover tax. Tax payer is a sole proprietor. turnover less than R 335000. tax payer draws a salary of R 7000pm.


Important:

This answer is based on tax law for the tax year ending 28 February 2020.

Answer:

Because the individual, wanting to be registered as a micro business, carries on the trade as a sole proprietor, there will be no employer / employee relationship. There is therefore no employees tax on the drawings and he will be 'taxed' on the taxable income, before the drawings are taken into account. Once registered as a micro business, and we accept he meets all the requirements, the tax will be based on the taxable turnover. 

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