SA Investment Conference: SMMEs will be prioritised
JOHANNESBURG - President Cyril Ramaphosa has committed government prioritise greater support to the small, medium and micro-enterprises (SMME) sector in South Africa, including giving them more business, paying them on time and easing the regulatory framework.
South African SMMEs face a variety of challenges that severely impact their viability, more especially late payments have forced some of them out of business.
Speaking at the SMME programme during the 2nd SA Investment Conference in Soweto, Ramaphosa said concerns have been raised by SMME owners and operators.
He said issues around access to financing, late payment for services rendered to government, a high regulatory burden, lack of access to information, economic infrastructure and rising fuel and utility costs, were among other things that SMMEs had complained about.
Ramaphosa said under the soon to be finalised Public Procurement Bill, organs of state will be required to sub-contract SMMEs to a minimum of 30 percent of the value of the contract for contracts that are above R30 million.
“Working with social partners, we remain committed to improving the legal and regulatory environment, ensuring access to markets and finance, skills training, and access to quality infrastructure for SMMEs, especially in townships and rural areas,” Ramaphosa said.
“Compliance with the 30-day payment period plays a key role in ensuring the operational sustainability of SMMEs. Therefore, organs of state will be closely monitored on their compliance with the 30-day payment period and any non-compliance is viewed as financial misconduct and will be dealt with accordingly.”
Ramaphosa said it was time to reignite the township economy because townships have always represented the heartbeat of a thriving economy, which grew against all odds.
He said the details of the establishment of the Township Entrepreneurship Fund, which is aimed at stimulating the township economy, were being finalised by the Minister of Small Business Development.
Ramaphosa also said the tax regime for SMMEs was being simplified.
“An example of this is the requirement for annual rather than biannual tax returns. Grants received by SMMEs are also tax exempt. Enhancements have also been made to the venture capital company tax regime to encourage investment in small businesses and junior mining companies,” he said.
“Another measure to support SMMEs is in the form of the Competition Amendment Act. Once it comes into operation, it will increase access to the economy for small, medium and black-owned businesses.”
Ramaphosa announced on Wednesday that the total value of investment commitments made at the Investment Conference was R363 billion, with indications of a further R8 billion in planned investments subject to either regulatory or company board approvals, which would lead to the creation of around 412,000 direct jobs over the next five years.