NEWS RELEASE FROM THE AHI
11 May 2017
Small Business Association Will Call on Finance Minister to Ease SME Burdens
As part of a delegation from Business Unity South Africa (BUSA) meeting with Finance Minister Gigaba, the AHi today proposed four points it will suggest to the minister aimed at easing burdens on SMEs:
• Prioritise and spearhead cabinet-level agreement to require ministries to pay SMEs for satisfactory work done in no more than 60 days;
• Instruct SARS to develop a method of issuing tax clearance certificates to SMEs within 30 days of a request. Where there is dispute, to initiate a fast-track, one-stop resolution department;
• Consider amending the VAT Act to allow SMEs to account for VAT on a cash basis to improve their cash flow, while at the same time releasing payments due without further delay;
• Consider the AHi proposal to grant tax amnesty to SMEs to help bring those unregistered into the system and ascertain how many formal SMEs exist in SA for better evidence-based policy development.
“Economic stability is precarious now,” said AHi President Bernard Swanepoel. “As capital investment is held back due to uncertainty, procurement from SMEs will decline. Higher interest rates will mean debt-stretched SMEs will struggle to make repayments.”
“To add insult to injury, delayed payment for satisfactory work completed has a devastating impact on much-needed cash flow for SMEs.”
Last month the AHi issued a challenge to business chambers to urge their member SMEs to create two entry-level jobs this year. “Whether we have two million or four million SMEs (since no one really knows), the Each1Create2 campaign could remove a lot of people from the unemployment rolls,” said Swanepoel. “But without adequate cash flow and certainty in respect of VAT refunds, it’s difficult for businesses to commit to new-hires.”
CEO Dr Ernest Messina said the ideas AHi plans to raise with the minister were among the most pressing challenges for SMEs, following the skills deficit, which is their number one concern.
“Without deliberate interventions by the finance minister where his jurisdiction allows, some SMEs will battle to survive, let alone create jobs,” he said. For instance, to tender a bid, businesses require tax clearance certificate. A recent survey said one in five businesses had suffered ‘protracted time and onerousness involved in getting tax clearance certificates’.
“The minister should be working with SARS and his colleagues in the Cabinet to ensure every effort is made to accommodate the needs of businesses most likely to create jobs and contribute to the inclusive growth we all seek.”