Cape Town – Minister of Finance Pravin Gordhan has proposed further tax relief for small businesses, including an increase in the monetary thresholds of Graduated Tax for Small Business Corporations, which translates to R360 million in tax relief to small firms.
Government proposes that the R14 million turnover threshold for small business corporations be lifted to R20 million and that the graduated tax structure also be adjusted.
The proposal is that small firms classed as Small Business Corporations with a taxable income of less than R67 111 not be subject to any tax – up from the present threshold of R63 556 – while those with a taxable income of between R67 112 and R365 000 will be taxed at 7 percent.
Currently small business corporations with taxable incomes of above R350 000 are subject to the corporate tax rate of 28 percent.
But the proposal is to shift this so that entities with a taxable income of between R360 001 and R550 000 are subject to 21 percent, while those with a taxable income of above R550 001 are subject to 28 percent.
National Treasury has also proposed that public-benefit organisations be subject to the same new rate structure as small business corporations.
The Budget Review says the feasibility of special support for social-impact businesses (or social enterprises) which have both profit-making and social objectives, is being explored.
Gordhan introduced several initiatives that support business development.
Additional funding of R1.5 billion has been provided to the Department of Trade and Industry to disburse to manufacturers through the Manufacturing Competitiveness Enhancements Programme, which was introduced last year.
The programme has received 215 applications – mainly from the chemicals, agro-processing and metals sectors – with requests for grants totaling R2.3 billion, he said.
Gordhan said he was in talks with the Minister of Trade and Industry Rob Davies on the introduction of tax incentives for the Special Economic Zones (SEZs) programme which was announced last year.
He said the National Treasury’s Jobs Fund, which was announced in the 2011 Budget, has so far received 3 614 applications, with grant funding of R3.3bn approved for 65 projects, topped up with an additional R3.3 billion from the private sector. – SAnews.gov.za