Many would agree that one of the main growth areas in the South African economy is small business. Small business has the potential to become a serious player in the job market, if there is sufficient support by government. At the recently held ACCA Budget Brief, the main point of the discussion was on the stimulation of the economy, specifically in relation to SMMEs.
The event was spear-headed by ACCA SA’s Technical Manager, Thuli Ntshele, supported by four expert panellists; Henry Mundeya (SARS), Lullu Krugel (KPMG), Hassen Kajie (Nexia SAB&T) and John Benson (Tax Practitioner). Opening comments from the members of the panel underlined key changes in monetary thresholds and highlighted a number of incentives such as employment tax incentives. www.nexia-sabt.co.za
According to Thuli Ntshele, small businesses make up an approximated 40% of all entities in the economy, playing a vital role with potential to make significant contributions to job creation, sustained employment and economic growth. Liveblog.mg.co.za reported that the tax review committee concluded that lower tax rates for small business operations were not effective enough and alone did not lead to growth or address tax compliance costs. The committee has suggested replacing the tax regime with an annual refundable tax compliance rebate. Even though small businesses have received R360million in tax relief, it was emphasised that more focus and resources needed to pumped into the small business sector to draw much-needed support to aid SMMEs and boost job creation.
“Ideally, when it comes to taxes, we should consume only 30% of our children’s ice cream and teach them about taxes. Ironically, it appears that we consume all of the ice cream and still making our children pay for it.” – Lullu Krugel
The 2014/2015 budget speech provided necessary relief and adequate incentives that will ultimately stimulate economic growth, but adequate growth is not something we can live with. The solution to unemployment lies in cultivating small enterprises and ensuring that they thrive. One component highlighted was a recommendation for the formation of an Administration Agency, a catalyst in the development, growth and education of SMMEs. This idea furthermore sets good entrepreneur habits such as turning obstacles into assets, working closely with government and the dti.co.za. This was mooted by all members of the panel, but would this be integrated into the NDP?
To view the 2014 line up of round table discussion hosted by ACCA and partners visit www.accaglobal.com . For further information on the governments outline approach to small business and development visit http://www.npconline.co.za.
ACCA South Africa.