POL­ICY 2

Finweek English Edition - - BUSINESS -

Cash f low is the lifeblood of small busi­ness. In­voic­ing big busi­ness or government for work done is key to get­ting paid. In many in­stances, pay­ment is stretched well be­yond rea­son­able pay­ment pe­ri­ods and i n some cases for months. The VAT im­pact gen­er­ated by the in­voice in one month and the de­layed pay­ment of the in­voice months later gen­er­ates cash f low crises for small busi­nesses.

We call for the re­place­ment of the ac­crual VAT sys­tem by a cash re­ceipts VAT sys­tem to match the gen­er­a­tion and pay­ment of VAT with pay­ment of the in­voice by the cus­tomer. up to growth. This in­abil­ity in SA to seek and se­cure f und­ing sees many a good busi­ness de­velop at a snail’s pace or even­tu­ally fail, some­thing that SA can­not af­ford.

We call for a fur­ther re­vi­sion of the rel­e­vant sec­tion of the In­come Tax Act (S12J) in or­der to mo­ti­vate and mo­bilise the cre­ation of pri­vate-sec­tor fund­ing through the es­tab­lish­ment of an­gel fun­ders and pri­vate fun­ders who are mo­ti­vated by the tax pol­icy to in­vest their funds dur­ing the for­ma­tive stages of the busi­ness devel­op­ment process.

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