This report helps to provide understanding of the implications tax poses on small businesses in New Zealand. This is analysed using current literature found on internet databases using secondary research. The conclusion of this report shows that tax is costly on small businesses and is a time-consuming process for small businesses who do not hire outside accounting help. This report helps to show how the current tax system is over complicated and leaves small businesses at a disadvantage. This study also helps to emphasise how tax evasion is a major problem in New Zealand costing the country billions, and how this links to small businesses and the over complicated nature of the tax system. Recommendations following this study are that the New Zealand tax system needs to be simplified to help small businesses successfully pay their taxes. Another recommendation following the literature is that small businesses should have to spend on average one hour and make one payment per month for their compliance.