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Four ways Gigaba can ease burden of SMEs - chamber

May 12 2017 20:18

Johannesburg - There are four ways the new Minister of Finance Malusi Gigabe can ease the burden of SMES, according to the AHi.

The business chamber will be part of a delegation from Business Unity South Africa (Busa) to meet with Gigaba and the AHi on Friday proposed these four points it would like to raise with him.

Dr Ernest Messina, CEO of the AHi, said the ideas the AHi plans to raise with Gigabe were among the most pressing challenges for SMEs, following the skills deficit, which is their number one concern.
 
“Without deliberate interventions by the finance minister where his jurisdiction allows, some SMEs will battle to survive, let alone create jobs,” he said.

For instance, to tender a bid, a business requires a tax clearance certificate. A recent survey said one in five businesses had suffered "protracted time and onerousness involved in getting tax clearance certificates".
 
“The minister should be working with SARS and his colleagues in Cabinet to ensure every effort is made to accommodate the needs of businesses most likely to create jobs and contribute to the inclusive growth we all seek,” said Messina.

The AHi suggests that Gigaba should prioritise and spearhead cabinet-level agreement to require ministries to pay SMEs for satisfactory work done in no more than 60 days.

READ: Economic change in SA: Gigaba has the answers

Secondly, he should instruct the SA Revenue Service (SARS) to develop a method of issuing tax clearance certificates to SMEs within 30 days of a request. Where there is a dispute, it should initiate a fast-track, one-stop resolution at the department.

Thirdly, there should be a consideration of amending the VAT Act to allow SMEs to account for VAT on a cash basis to improve their cash flow, while at the same time releasing payments due without further delay.

Fourthly, he should consider the AHi's proposal to grant tax amnesty to SMEs to help bring those unregistered ones into the system. Ascertaining how many formal SMEs exist in SA would enable better evidence-based policy development.
 
“Economic stability is precarious now. As capital investment is held back due to uncertainty, procurement from SMEs will decline. Higher interest rates will mean debt-stretched SMEs will struggle to make repayments,” said AHi President Bernard Swanepoel.
 
“To add insult to injury, delayed payment for satisfactory work completed has a devastating impact on much-needed cash flow for SMEs.”
 
Last month the AHi issued a challenge to business chambers to urge their member SMEs to create two entry-level jobs this year.

“Whether we have two million or four million SMEs (since no one really knows), the Each1Create2 campaign could remove a lot of people from the unemployment rolls,” said Swanepoel.

“But without adequate cash flow and certainty in respect of VAT refunds, it’s difficult for businesses to commit to new hires.”

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ahi  |  malusi gigaba  |  small business  |  business  |  entrepreneurs  |  smes
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