Budget Speech positive for Small Businesses

Ethel Nyembe
Small businesses in South Africa can breathe a sigh of relief following Finance Minister, Nhlanhla Nene’s announcement that businesses with turnovers of below R1 million a year will have their tax rates reduced from 6% to 3%.

Ethel Nyembe, Head of Small Enterprise at Standard Bank says the incentives will help small businesses to establish their businesses more firmly and increase profitability. The practical benefit of reducing the tax rate will be on reducing operating costs for SMEs, who will be able to plough the windfall back into their businesses.

“Making matters even more attractive for SMEs is the move by SARS to have small business desks set aside at key offices - this will vastly ease the red tape that previously posed a challenge for SMEs.”

Although no details were supplied on how the R3.5 billion being allocated to the Small Business Ministry will be utilised on the ground, it is encouraging to note that the government is intent on educating and equipping the SME sector with the skills necessary to successfully conduct business.  

“Any impact that this has on reducing the business failure rate in South Africa will be for the benefit of all,” concludes Ms Nyembe.