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Here are 5 ways the South African tax system punishes business owners right now. Number 5, forced VAT registration at R1 million. VAT is the 15% tax you charge customers and pay to SARS. The R1 million threshold hasn't changed since 2009. With inflation it should be R2.2 million today. Setup costs you R15,000 to R25,000, plus R3,000 to R8,000 monthly for compliance. Number 4, payroll tax penalties. These are taxes on employee salaries like PAYE and UIF. Miss a deadline and SARS hits you with 10%