WHATS NEWS FOR SMMEs

The top 5 most recent changes affecting accounting for SMMEs (Small, Medium and Micro Enterprises) in South Africa, based on updates from local regulatory bodies and international accounting trends as of 2024/2025:

1. IFRS for SMEs – 2023 Amendments (Effective 2025)

The IASB issued amendments to the IFRS for SMEs Standard in 2023, with effective implementation from January 2025. Key changes include:

• Recognition of revenue aligned more closely with IFRS 15 principles.

• Simplified accounting for leases, mirroring a lighter version of IFRS 16.

• Updated definitions and disclosures for fair value, financial instruments, and impairment.

Impact for SMMEs: Better alignment with full IFRS while retaining simplicity; however, requires training and system updates for compliance.

2. CIPC Compliance & XBRL Filing Expansion

The Companies and Intellectual Property Commission (CIPC) expanded XBRL (eXtensible Business Reporting Language) compliance:

• Private companies (SMMEs) that are audited or independently reviewed are now expected to file AFS using XBRL, not PDF uploads.

• Software and validation requirements have been enhanced.

Impact for SMMEs: Increased administrative and IT burden. Small businesses need either external accountants familiar with XBRL or must invest in compliant tools.

3. Beneficial Ownership and Transparency Rules (2023–2024)

As part of global anti-money laundering compliance (FATF greylisting response), beneficial ownership disclosures became mandatory:

• Companies and trusts must register ultimate beneficial owners with the Companies Register.

• Accountants must maintain proper records and submit disclosures for clients.

Impact for SMMEs: Extra administrative duties and higher compliance costs, particularly for companies with layered ownership structures.

4. SARS Auto-Assessment and eFiling Integration Changes

SARS has expanded auto-assessments and third-party data integration for small businesses and sole proprietors:

• More aggressive use of third-party financial data (e.g., bank interest, investment income, payment records).

• SARS eFiling system now includes pre-populated returns for small business taxpayers.

Impact for SMMEs: Less room for manual adjustments and estimates; clean and timely record-keeping is essential to avoid SARS audits or penalties.

5. Provisional Tax Threshold Review and Compliance Crackdown (2024)

SARS is tightening provisional tax compliance enforcement:

• Greater scrutiny of under-declared income and estimated payments by small businesses.

• Penalties and interest are more aggressively applied under Section 89quat.

• Thresholds for voluntary registration and deregistration for provisional tax have been clarified for micro-businesses under Turnover Tax.

Impact for SMMEs: Need for accurate forecasting and record-keeping; poor provisional estimates can result in cash flow strain due to back-dated penalties.

Conclusion

These changes reflect a shift toward greater transparency, digitisation, and international alignment. While the intent is to reduce tax evasion and improve reporting, the compliance burden on SMMEs has increased, demanding more proactive accounting support and early planning.

For support or advice please contact us on T:+27 31 564 6550 or E:queries@acsplus.co.za