SME support lauded

Organised business yesterday gave a warm reception to plans announced by Finance Minister Pravin Gordhan in his Budget speech to boost small and medium enterprises.

"This Budget allocates R6.5-billion over three years to support small and medium enterprises," Gordhan said.

This sector is usually the most vulnerable to cost pressures and often struggles to find affordable finance. To help with this, the Treasury said all grants received by SMEs would be tax-exempt, regardless of the source.

The SA Chamber of Commerce and Industry said SME support and tax exemption for grants would open significant funds to the sector.

Business Unity SA called the Budget a "realistic and balanced assessment of the economic outlook".

Gordhan told parliament that he had accepted two recommendations of the Davis Tax Committee, which he appointed last year.

Firstly, the turnover tax regime would now be amended to further reduce the tax burden on micro enterprises.

Secondly, the Treasury was considering "replacing the graduated tax structure for small business corporations with a refundable tax compliance credit", he said.

The business chamber thought this was a good idea.

"The tax compliance rebate proposal will reduce the administrative burden . The recognition that the turnover tax is not working in its current form recognises the advice from the business community," the chamber said.

Busa said the emphasis placed on SME support was appropriate.

Businesses would also soon have easy access to foreign venture capital.

Gordhan also announced that changes would be made to the venture capital company tax regime and that amendments would be made to the intellectual property rules as part of this.