January 29, 2015 at 4:52 pm #393Marican IncorporatedKeymaster
What The Budget Does for SMEs
The 2013 budget speech had some good news for SMEs, including tax relief and revised tax thresholds for small business.
The tax incentives include:
- A 15% corporate income tax rate for businesses in these areas
- An employment incentive allowing a tax deduction for employment of workers earning less than R60 000 per year
- An accelerated depreciation allowance for buildings in these areas, based on the existing regime for urban development zones – in order to encourage developers to invest more in industrial premises.
Maria says government’s intention is clearly to stimulate business activity in these areas and business owners should seriously consider making use of these opportunities.
Maria Vannucci, director, at Marican Incorporated says the incentives for special economic zones may prove a useful incentive in the job creation drive and regeneration of certain targeted zones.
The CEO of the South African Chamber of Commerce and Industry, Neren Rau, welcomed the promise of negotiating tax incentives in the special economic zones.
New tax brackets
Government proposes that the R14 million turnover threshold for small business corporations be increased to R20 million and that the graduated tax structure for such corporations are revised as follows:
Maria advises business owners to seek advice from reputable tax advisers to find out if and how they can utilise these rules to their advantage.
Maria says the increased threshold is welcome in that it will incentivise small businesses and stimulate this industry.
Incentives to Promote Job Creation
SMEs could receive government incentives for hiring unemployed youth.
In his budget speech, Finance Minister Pravin Gordhan said, “One of our most pressing development challenges is to expand work opportunities for young people. There has been extensive debate on how this should be done.
“The answer is that a wide range of measures are needed, including further education, training, public employment opportunities and support for job creation in the private sector.
“To complement existing programmes, a tax incentive aimed at sharing the costs of employing young work-seekers will be tabled for consideration by Parliament. It will help young people enter the labour market to gain valuable experience and access career opportunities. A similar incentive is proposed for eligible workers of all ages within special economic zones”
Job incentive widely welcomed
Marican’s head, Maria Vannucci, says the youth employment tax incentive would encourage the hiring of young people.
The incentive will create a graduated tax incentive at the entry-level wage, falling to zero when earnings reach the personal income tax threshold.
Maria Vannucci, at Marican Incorporated says government has shown it is serious about the employment of youth.
The aim of the employment tax incentive is to help young people to enter the labour market, gain valuable experience and have access to career opportunities. Vannucci says, “In conjunction with this initiative the proposed Employment Services Bill of 2010 will assist with addressing the unemployment of young people through the creation of work schemes.
The CEO of the South African Chamber of Commerce and Industry, Neren Rau, also welcomed the roll-out of the youth employment incentive scheme.
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