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.