“Overall, I think the Minister had a very tough task to start with in trying to increase tax revenue and reduce costs. I think he has probably done the best he can with limited scope to move. The lack of tax increases is positive for the man in the street and for small businesses but at the same time, I do understand that they must spend money on things like Covid-19. It is great that they are not raising additional taxes to pay for this, but I do wonder what it means for our increased debt burden to finance this,” Garth Rossiter, Chief Risk Officer at SME service provider Lulalend commented post the delivery of the Budget Speech in Parliament last week.
According to Rossiter, lowering the tax rate (for corporates) is great news, as it increases the competitiveness and puts corporates on a more even footing with international competitors.
“As far as creating an enabling business environment – the Minister is correct. There are a lot of structural constraints that predate the Covid-19 pandemic, such as the Eskom power supply issues. Keeping the lights on is vital for all businesses, and for small business in particular. While we have seen some growth and recovery in the SME sector recently, it is critical that everything is done to create an enabling environment for this critical business sector,” he comments.
Rossiter mentioned that he is encouraged by the Minister’s comments on lowering the barriers to entry. “This is key to making it easier to do business and thereby growing your economy. The more we can do that, the more we can create employment and grow our economy which ultimately grows the tax base.”
“The R4bn allocated on the medium term to township and rural enterprises is good news. I would like to see how it will be allocated, but anything that grows businesses in these areas must be seen as a fantastic initiative,” he concludes.
