Weekend Argus (Sunday Edition)

Opportunit­ies for SMEs in Budget

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week to all government department­s and public institutio­ns to pay suppliers on time or be charged with financial misconduct. This is crucial to the survival of small businesses as late payment has a direct impact on their cash flow. While this is nothing new, the threat of being charged is a welcome addition.

Another positive is the R100 billion Black Business Growth Fund to be created as a result of the finalisati­on of the revised Financial Sector Codes. This could have a significan­t impact on black businesses growth as the initiative is expected to dramatical­ly improve their access to funding.

Gigaba will approve six special economic zones set to benefit from additional tax incentives including a reduced corporate tax rate for qualifying firms. This overall policy is driven by the Department of Trade and Industry and seeks to encourage investment in the manufactur­ing and tradeable services sectors. As such, it will provide opportunit­ies for SMEs to tap into by either supplying infrastruc­ture or material in these zones.

The speech, however, was not all positive for SMEs. For example, although the Treasury has made the provisiona­l allocation of R2.1 billion for SME start-ups, it is disappoint­ing that it will only begin operating in 2019/20. SMEs need support now more than ever.

Another setback is the announceme­nt of the VAT hike to 15 percent. Although Treasury had to implement measures to minimise the fiscal deficit, this will have an effect on both price-sensitive SMEs as well as consumer expenditur­e.

However, the outlook for SMEs in 2018 remains mostly positive. Looking at the year ahead for SMEs, I am hopeful that the government will indeed address policy uncertaint­y through the support and input of the soon-to-be-establishe­d Presidenti­al Economic Advisory Council, as announced at the Sona.

The Sona promised to reduce regulatory barriers for small businesses and should see the government improve efficient policy administra­tion and implementa­tion.

Efficiency and policy certainty will encourage co-operation between investors, business, government and labour.

This will have a positive impact on business optimism, which combined with the possibilit­y of new infrastruc­ture projects will lead to higher growth and possibly increased consumer spending, despite the increases in tax.

I believe that the country’s economy has turned a corner.

Ben Bierman is managing director at Business Partners Limited.

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Ben Bierman

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