Author: Tiaan Geel
The saying of “give the king what is due to the king” is as old as human’s recorded history and is applicable to our current lives more than ever. Many entrepreneurs struggle with the question of whether to pay their taxes due at month end or should they rather pay the suppliers that will supply them more stock.
As a business owner in South Africa, you made the conscious decision of opening a business in this country and running it according to the laws of the land. This implies that the business and its owner have a legal and social responsibility to pay the taxes due to the government (the king).
The legal responsibility is derived from the laws that govern our dealings, some of which are the quite comprehensive Income Tax Act and the Value Added Tax Act. These acts dictate some of the taxes we should pay and when to pay it. If you as the business owner do not agree with these laws and regulations, it is your duty to substantiate your criticisms to the king at the appropriate times or, as harsh as it may sound, find another country to operate your business from.
The social responsibility derives from the fact that a business needs to operate responsibly and ethically and understand that it is contributing to the society as a whole. The business owner has a responsibility to pay its employees for the work they have done, a responsibility to pay its suppliers for the goods they provided and a responsibility to pay the correct taxes due.
Milton Friedman famously stated that the only social responsibility of business is to make a profit. The business owner should rather ask the question “Is my business operating profitably every month?” This question will help the business owner determine why the business does not have enough cash available to pay its taxes when they are due.