Plans to consider legislative changes by the Small Business Development department as contained in the Finance Minister Tito Mboweni’s maiden Budget Speech are expected to go a long way towards making the entrepreneurial eco-system more conducive for the formation and growth of small, micro and medium enterprises (SMMEs).
This is according to Gugu Mjadu, Spokesperson for the 2019 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS who says the strategy by the small business department to undertake various legislative and policy reviews and amendments should lead to the decline in the notorious red tape cited by many entrepreneurs as one of the impediments in their entrepreneurial endeavours.
Mjadu also makes the following commentary on aspects of today’s Budget Speech impacting entrepreneurs and small, micro and medium enterprises (SMMEs):
Employment Tax Incentive
“In addition to the 10 year extension of the employment tax incentive introduced in 2014, Minister Mboweni announced that the income eligibility thresholds for the incentive will be increased. The decision is a move in the right direction to 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. In the process, these SMMEs will not only be creating much needed employment for the youth but by hosting them in their companies thus exposing young people to the world of entrepreneurship, they will be contributing towards stimulating entrepreneurial activity.
“Job creation is everybody’s responsibility, and through this scheme, entrepreneurs can play their part – and benefit from it too,” says Mjadu.
Small Enterprise Development Agency
“Minister Mboweni announced that the National Treasury has allocated R481,6 million to the Small Enterprise Development Agency (SEDA) to expand the small business incubation programme. This is another positive step for stimulating entrepreneurship in the country and increasing chances of survival for SMMEs.
“Furthermore, the R3,2 billion budget allocation over the MTEF 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,” says Mjadu.
Budget Speech: A view from the entrepreneurship sector
“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 Goals. In particular, we 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 the country’s GDP,” Mjadu concludes.