DURBAN – Small business is identified as an imperative in the National Development Plan 2030 and as a primary job creator with plans for 90 percent of jobs to be in Small Medium Enterprises (SME).
"This has been the policy position in many of the previous seven economic policies South Africa have had in the last 25 years. Their importance as a job creator is evident throughout the world, up to 70 percent of jobs in Organisation for Economic Co-operation and Development are in small business and according to the World Bank in emerging markets they also provide the majority of jobs and four out of five new jobs," said Pieter Faber, SAICA Senior Executive: Tax.
However, in South Africa, this may be different, especially in the formal employment sector. Though many claims of SME’s being a primary employer in SA have been made, a recent study by the Small Business Institute claims that only 28 percent of jobs are created by SME’s. Government and the top 1 000 big companies provide 56 percent of formal sector employment. Do we have too much of a “culture of employment” where “others” must create the jobs?
"One other area to look for solutions is how easy it is to do business in South Africa as an SME – a study that the World Bank has been doing for a number of years in its Doing Business Report. This study looks at ten different but practical aspects of starting and running a new business, including paying taxes and getting electricity, and South Africa has plummeted from being in the top 50 to 82 in the last few years." added Faber.
This has not gone unnoticed and government in 2017 put together working groups for each of the areas in the doing business report that impact SME’s. These workgroups were tasked with identifying recommendations to improve the rankings and were composed of representatives from various governmental departments, the City of Johannesburg and business, including SAICA in the Paying Taxes Workgroup.