That South Africa needs to see small business fly is a given: salaried jobs in corporates and government are no longer the order of the day and the tremendous need for jobs can only be satisfied through developing new businesses. The climate must be right for entrepreneurship to thrive.
"We appeal to our Minister of Finance to do the right thing for small business when he gives his Budget speech on Wednesday," says Mdu Bophela, Head of Solutions for New Businesses at First National Bank (FNB). "There are a few things in particular that we would like to see coming in because they would provide much-needed stimulus for entrepreneurs."
Tax incentives could go a long way to help improve the climate. Bophela believes that a good way to structure this would be to grant a tax incentive to businesses with five employees in their first year of trading because this means that five jobs have been created. "Further tax breaks could be given to firms that increase their employment figures by, say, 25% during the next two to five years of operation," says Bophela. "And the tax incentive concept could be used further to encourage entrepreneurs to create jobs in rural areas."
The tax break idea has further potential: it could be used to incentivise small businesses to achieve certain performance targets, such as R-1 million turnover in the first year of operation, provide skills training to 25% of employees, achieve gender/equity numbers in the first year of operation or successfully expand their businesses into rural areas.
"Finally," Bophela says, "FNB would like to see small businesses being offered the first right of refusal on government tenders if they comply with the soon-to-be-released SME scorecard."
Bophela believes that there are numerous opportunities for incentives to provide the right environment that small business development needs.
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