Small businesses will lead fight against poverty, inequality and unemployment
Small, medium and micro enterprise (SMMEs) remains the key to unlocking job creation and economic growth over the next decade and a half.
This is according to Anton van Heerden, Executive Vice-President and Managing Director, Sage South and Southern Africa, who said even though the South African government is well aware of such a reality, often SMME’s are forgotten by policymakers as they try to juggle the demands of stakeholders such as big business and labour.
“In an economy where big businesses are automating their processes and downsizing, it is small businesses who will lead the country’s fight against poverty, inequality and unemployment.
“One has to remember the National Development Plan envisions 90 per cent of new employment by 2030 will be generated by SMMEs,” said Van Heerden.
“In that context, it was refreshing to hear Finance Minister Gordhan use the 2016 Budget Speech to mention some small business-friendly steps the government plans to take in the next year or so.
“His promise to ease regulatory burdens for businesses is encouraging. Though he didn’t give much detail about what this will entail, we welcome any moves to make it easier to do business.
“Red tape ultimately benefits big businesses who have the resources to manage complex compliance requirements.
“Less administrative overheads will help smaller businesses to focus on growing rather than on ticking regulatory boxes.
“We look forward to seeing more specifics here – we believe that there is scope to make labour relations, registering a company, and dealing with the South African Revenue Service much easier for SMMEs.
“Minister Gordhan also announced that government has earmarked R475-million for the Department of Small Business to help small and medium businesses.
“Again, this is a positive development, but we’d love to see more detail about how the Department will be spending this money. In countries such as the United Kingdom, governments support start-up companies and entrepreneurs through access to mentoring programmes and funding; we would welcome a similar approach in South Africa.
“We are also pleased that Minister Gordhan has managed to balance the books without needing to hike company tax, personal income tax, or VAT.
“Many market observers had expected tax increases, but these would have been counterproductive in our current economic climate. Our SMMEs are already deeply challenged by the collapse in the value of the rand, electricity price hikes, high interest rates and slow economic growth.
“Tax hikes would simply have hurt consumer and business confidence further and dampened economic growth.
“On the tax front, turnover tax already simplifies tax administration for the smallest businesses, but we would have liked to have seen the concept extended to companies with more than R1-m in turnover.
“Perhaps R5-m would be a more appropriate level. As a micro-business owner, you should be encouraged to grow rather than face more onerous tax and regulatory burdens once your turnover exceeds R1-m.
“We hope that government is truly committed to removing the barriers to SMME success. The promises Minister Gordhan made in his speech are a step in the right direction.”
