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Finance Minister Tito Mboweni made the right move
when he extended the employment tax incentive by ten years and increased income
eligibility thresholds for the incentive in his Budget 2019 speech, says Gugu
Mjadu, spokesperson for the 2019 Entrepreneur of the Year competition,
sponsored by Sanlam and Business Partners.
In Mjadu's view, the decision will help curb youth
unemployment while rewarding employers, particularly entrepreneurs, for
creating much-needed jobs.
From as soon as next month, employers can claim R1
000 per month in tax incentive for young employees earning up to R4 500 - up
from R4 000.
"The impact of this on entrepreneurs is a
positive one as those currently evaluating the viability of hiring staff will
now hopefully be more inclined to do so," said Mjadu.
"In the process, these SMMEs will not only be
creating much needed employment for the youth but by hosting them in their companies,
they will be contributing towards stimulating entrepreneurial activity by
exposing young people to the world of entrepreneurship."
Small Enterprise Development Agency
Another step in the right direction by Mboweni,
according to Mjadu, is the announcement that the National Treasury has
allocated R481.6m to the Small Enterprise Development Agency (SEDA) to expand
the small business incubation programme. This will increase the chances of
survival for SMMEs in Mjadu's view.
"Furthermore, the R3.2bn budget allocation
over the medium term for the small business and innovation fund addresses one
of the biggest barriers to entry for entrepreneurs – funding. This and other
budget increases for initiatives targeted at financing entrepreneurs by government
is applauded, particularly when we consider that 88% of all entrepreneurs are
self-funded," said Mjadu.
"While we appreciate steps being taken by government
to bolster entrepreneurship in the country, we believe more needs to be done by
both the public and private sector in order to achieve the National Development
In particular, Business Partners would like to see
finality around the relaxation of visa regulations to make it easier for
tourists to invest in and visit South Africa, as this sector houses a high
number of entrepreneurs, has low barriers of entry for SMMEs, and is one of the
biggest contributors to SA's gross domestic product.