The tax plans for the next three years have just been announced by Finance Minister Nhlanhla Nene, and we have a look at the impact his announcement will have on ordinary businesses in South Africa.
The most obvious impact of the budget is the tax relief to micro businesses, where small and medium-sized enterprises (SMEs) with a turnover under R335 000 will not be taxed – previously this amount was only R150 000. This tax decision is great news for small business owners, who can now use this money for growth, and it’s positive news for the economy, as it’s a way to get entrepreneurs thinking about starting new ventures.
One of the greatest challenges facing SMEs will come in the form of indirect taxes, such as the fuel levy and the road accident fund levy. These will sneak up on anyone but especially small business owners who need vehicles in order to operate. From April 1st, there will be an increase of 80.5c per litre because of the fuel levy and the road accident fund.
It might not sound like a lot for a company that only has one bakkie for its plumbing service, but when there are several cars that make up a sales team, and they have to drive around the country, then these costs quickly multiply and could add up to tens of thousands of Rands a year.
Business owners need to take these new tax set-backs into consideration when they plan their budget for the year, as they will have to work hard to get extra sales to grow their business and prevent it from going backwards. As much as business owners don’t want to admit this, business in the next few years is about the game of the fittest.
Luckily, you don’t have to fend for yourself. Talk to LEAP today about business process outsourcing, finding reliable suppliers, and enterprise development. Contact us on 011 449 7074 or visit www.leapco.co.za.