Budget 2024: Five things Finance Minister can announce in the budget to help SMEs grow

Any announcement by the Finance Minister Enoch Godongwana to cut red tape can help SMEs accelerate growth. Picture: Freepik

Any announcement by the Finance Minister Enoch Godongwana to cut red tape can help SMEs accelerate growth. Picture: Freepik

Published Feb 20, 2024


Given the challenges that continue to place a burden on the bottom line of businesses, SMEs are waiting in anticipation for positive interventions that could be made by Finance Minister Enoch Godongwana during the tabling of the 2024 National Budget Speech.

These challenges include the current inflationary environment, high interest rates, and ongoing power outages.

Andiswa Bata, head of SME at FNB Commercial, said that adequately understanding the implications and opportunities presented by the Budget Speech is essential to help SMEs plan ahead.

"Paying special attention to the national budget speech should be a non-negotiable for SMEs. Not only does it influence the operational and economic environment in South Africa, but it also has a direct impact on the growth and survival of small businesses," Bata said.

Here are key points that SMEs want to hear in the Budget Speech:

Energy Supply

During the 2023 Budget Speech, various interventions were announced, enabling businesses to reduce their taxable income by 125% for the cost of investment in renewable energy generation projects. The government also implemented the Energy Bounce Back Scheme in partnership with banks. Bata said that any update on these initiatives would be welcomed by small business owners. The Finance Minister should also include any further interventions as the energy crisis continues to have ripple effects for businesses of all sizes.

Revenue Collection

According to Bata, there were zero increases in corporate tax, personal income tax, VAT, fuel levy, and the road accident fund levy last year. This went a long way to help ease cash flow pressure on businesses. "A similar or better outcome would likely be well received by SMEs in the current economic environment," Bata said.

Infrastructure Investment Last year, the government committed to spend, over time, a projected R903 billion on infrastructure like roads, power plants, and water supply initiatives, among other projects. Spending on infrastructure creates opportunities for SMEs that will allow them to participate in a wide range of projects across the country either in a lead or subcontracting capacity as service providers. Bata said, "Despite the finance minister conceding that this year's budget will be challenging, we remain hopeful that this kind of investment spend that stimulates the local economy will continue."

Targeted Support for Businesses

Other than the energy crisis, small businesses continue to face challenges that impact their growth and their ability to create jobs. According to Bata, industry-specific support, through various government agencies, for key sectors that keep South Africa's economic engine operating is essential.

Reducing Regulatory Burden

Bata said that due to the tough economic environment, any measures to lessen red tape will help cut costs, boost innovation, accelerate business growth, and job creation.

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