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Plea to Pravin

Feb 22 2011 10:07

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Johannesburg - A Fin24 reader has pleaded in an open letter for Finance Minister Pravin Gordhan to consider the impact of onerous legislation on small businesses and their ability to create jobs in South Africa.

Dear Pravin

I am a small business owner and would like to take up Mr Zuma's challenge to "come to the party" and employ more people.

I only have two permanent employees, but would like to add two more part-timers to help out during busy periods or when one of the permanents is absent.

But here's the problem. My tax adviser tells me that  even though they will only earn R250 per day, one day a week, it is my responsibility to ensure each temporary worker is registered as a taxpayer.  Furthermore, I need to deduct 25% of their income as PAYE.

I also need to register them for UIF and then deduct a further 1% from their pay, add a similar amount myself and pay it over every month to SARS (the South African Revenue Service). I have to administer all of this (including a twice-yearly reconciliation on a complicated SARS computer system) or pay an accountant to do it for me. And I also have to pay workman's compensation insurance once a year for these two temps.

And if I don't do all this, I could be liable for severe penalties.

So I probably won't hire these temps, because after all the hassle they won't work for what's left for them and I simply can't afford all the extra administration costs. So I will just have to make a plan when someone is absent from work.

It's a pity because hiring temps would help my business and it will give two more people a small income and some experience from which to move on to permanent employment one day.

I am sure there must be at least a million other small businesses who feel the same as I do. If they all only hired two temps, that would get you almost half way to meeting your target of five million new jobs.

And it won't cost you a cent.

Is there perhaps some way in which you could help to clear out the minefield of largely irrelevant laws that either stop small businesses like mine from doing the right thing, or force many to turn a blind eye and undermine the law?

I firmly believe that the answer to creating employment lies in the hands of small businesses. If you could just set the table, I am sure many of the small guys would love to come to the party.

Yours sincerely
Patriotic South African

 
 
 

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