What Does The 2023 Budget Speech Mean For SMEs

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The 2023 National Budget Speech made one message crystal-clear – over the course of the next few months, all available resources and efforts will be directed towards mitigating the impact of the ongoing energy crisis.

In the speech, government also invited millions of small businesses that have kept the country’s gross domestic product ticking over to become part of the solution.

This was one of the most significant insights to emerge from Finance Minister Enoch Godongwana’s recent address as he outlined various state-led interventions to be implemented as relief measures for small to medium-sized enterprises (SMEs). These are the policy changes you need to be aware of, and the practical steps you can take to position your small business for success in 2023.

Prepare to bounce back

The just energy transition is well under way in South Africa – one of the government’s solution to the load shedding crisis and their commitment to meeting sustainability targets. For ordinary South African households and businesses, a big part of the solution is to invest in solar-powered systems.

As per this year’s Budget Speech, the government is to provide solar-related loans to SMEs as part of an amendment to the Bounce Back Loan Guarantee Scheme that was implemented as a measure to help small businesses recover from Covid-19-related losses. Furthermore, as part of these developments the government will allow commercial banks to mobilise funds in the scheme to lease solar-energy equipment to SMEs countrywide.

Business owners can expect to hear more about how to access solar-related financing by May, 2023 and are urged to watch the news pages of banks and other financiers on how to apply.

In the meantime, you can prepare by ensuring that your cash-flow statements and business plans are up to date, your tax obligations have been met, your business is registered and that your income statements are ready for review. With a bit of forethought, you can poise yourself and your business to capitalise on the benefits of the scheme as soon as these updates have been made.

Go solar

A total of R5 billion has been allocated to companies through the expansion of the renewable-energy incentives. As per these amendments, businesses will be able to claim a 125% tax deduction in the first year for all renewable-energy projects, with no thresholds on generation capacity.

This will apply to all systems installed between March 1, 2023 and February 28, 2025. Enlisting the assistance and advice of a tax practitioner who can help you make the most of this incentive, within the required time-frames, may prove useful in decreasing the tax burden on your business.

A boost for the township economy

As part of government’s efforts to alleviate unemployment and uplifting businesses in under-serviced areas, R2.8 billion will be injected into the Township and Rural Entrepreneurship Fund to support more than 120 000 township and rural businesses.

Furthermore, there are sector-specific schemes available for businesses within the following categories: small-scale bakeries and confectionaries; autobody repairs; mechanics; butcheries; clothing; leather; textiles; personal care; spaza shops; shisanyamas; and cooked food.

To apply for funding or support, small business owners can approach the following institutions: the Small Enterprise Development Agency (Seda), the Small Enterprise Finance Agency (sefa), National Empowerment Fund (NEF) and the National Youth Development Agency (NYDA).

Look forward to less red tape

Reducing the red tape involved with conducting business in South Africa remains one of the key ways in which the government can contribute to the fostering of an enabling environment for business.

In this year’s Budget Speech, it was announced that amendments to the Businesses Act (1991) to reduce the regularity constraints for small businesses are in the process of being finalised. What these changes will mean for the way in which entrepreneurs enter the market and do business will become clearer within the next few months.

Credit – Taken from – https://www.msn.com/en-za/news/other/what-2023-s-budget-speech-means-for-your-small-enterprise/ar-AA18epte

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