Government needs to do more to ease financial plight of small companies
Share this article:
CAPE TOWN - More than 500 000 more people will be able to return to work soon following the government decision to ease lockdown restrictions, allowing small businesses such as restaurants, travel agents and hairdressers to reopen, but the government needs to do more to ease the financial plight of these companies.
Sage Africa & Middle East executive vice-president Pieter Bensch said on Friday that the months without trade had been extremely challenging for small businesses and their employees, many of whom were already struggling to make ends meet in a weak economy.
“The pandemic has battered consumer income and confidence, so business-as-usual will not resume at the flick of a switch. Many businesses may need ongoing support to pay their bills, keep people employed, and get through this time,” Bensch said.
Some small businesses had been locked down for more than 80 days, with most acknowledging that the government's R500 billion stimulus package for business owners and employees losing their income, was not enough.
“We would welcome announcements from the government around extending the temporary employer/employee relief scheme (TERS) and additional Employment Tax Incentive (ETI) relief measures to help small businesses get back on their feet,” said Bensch.
It was also a good time to accelerate the review of the preferential small business tax regime, the VAT registration threshold, and the turnover tax, as Finance Minister Tito Mboweni mentioned in the budget speech in February, he said,
Meanwhile, a multilateral alliance has come together to form the Covid-19 Small Business Relief Centre (CSBRC), which aims to provide small businesses with tools, skills and other resources to limit the erosion of jobs.
Health Squared Medical Scheme spokesperson Bianca Viljoen said if small businesses were not assisted to survive the pandemic, all South Africans were likely to feel the wider socio-economic consequences.
Communities’ local economies, whether rural or urban, rely on small businesses as sources of support for families and to stimulate other businesses in the area.
“By necessity many of these small businesses have been, and in many cases still remain, unable to operate. We were glad of the opportunity to support this vital sector through the CSBRC,” she said. Health Squared is a national sponsor of the CSBRC.
The centre brings together experts in various business fields to share their experience, knowledge and resources to help small businesses to survive this difficult time.
Mike Anderson, the chief executive of the National Small Business Chamber that launched the CSBRC, said more than 66 percent of the South African workforce work in small businesses.
“Covid-19 will likely change our local business landscape in many ways, however maximising the potential of small businesses to contribute to job creation, strengthening communities and building the economy can only be beneficial to society,” said Viljoen.