The 2023 National Budget Speech delivered by Finance Minister Enoch Godongwana on 22 February brought both good and bad news for small- and medium-sized enterprises (SMEs) in South Africa. While some measures were taken to address the concerns of the SME community, there were also some issues that remained unaddressed.

One of the most pressing issues for SMEs in South Africa is the energy crisis, with loadshedding causing disruptions to businesses across the country. In his speech, Minister Godongwana announced that the government will be rolling out state-level measures to help small businesses install solar power and energy-saving devices. This is a positive step that could help SMEs become more energy secure and reduce their reliance on the grid.

However, while the Minister did discuss the need for infrastructure development and investment, there was no specific mention of transport-related infrastructure, which is a priority for SMEs. South Africa’s poor roads and rail network make it difficult for small businesses to transport goods and access markets, so it’s important that the government focuses on improving this infrastructure to support SME growth.

One issue that was not addressed in the Budget Speech is the problem of crime, which is a major concern for SMEs. Small businesses are often targeted by criminals, who steal their stock or vandalize their premises. This not only causes financial losses but also leads to a loss of confidence and trust in the business. The government needs to do more to address crime in the country and provide better support to SMEs in this area.

Another challenge facing SMEs in South Africa is the high cost of rates and taxes, which can make it difficult for small businesses to remain competitive. While the Minister did not specifically address this issue in the Budget Speech, he did discuss the need for fiscal policy revisions to support industry development. This could include tax breaks and incentives for SMEs, which would help to reduce the burden of rates and taxes and support business growth.

Despite these challenges, there are also many positives to being a small business in an emerging economy like South Africa. SMEs have the potential to drive economic growth and create jobs, which is critical in a country with high levels of unemployment. With the right support from the government, SMEs can be a catalyst for change and make a significant contribution to the country’s development.

5 issues small business owners should take note of:

1. The adjustment of personal income tax brackets, increased medical tax credits, and upward adjustment of the tax brackets applicable to retirement fund lump sum benefits payable upon retirement and to retirement fund lump sum withdrawal benefits could provide relief for small business owners who may be classified as individuals for tax purposes.
2. The commitment to addressing the energy crisis and rolling out state-level measures to help small businesses install solar power and energy-saving devices could help small businesses reduce their energy costs and improve their bottom line.
3. The proposal to revise fiscal policy to support industry development, including the possible extension of tax incentives for small business corporations and the revision of the employment tax incentive, could help small businesses grow their ventures and alleviate youth unemployment.
4. The investment in transport-related infrastructure, such as the rehabilitation and expansion of the country’s urban rail network, could improve access to markets for small businesses and make public transport more efficient.
5. The proposal to extend the period within which the taxpayer who disagrees with an auto assessment is required to submit their request to SARS to make a reduced or additional assessment by submitting a true and full return could give small business owners more time to manage their tax affairs and ensure that they are not unfairly penalized.

Small businesses are the backbone of the South African economy, and their success is critical for the prosperity of the country. While there were some positive measures announced in the 2023 Budget Speech that will benefit small businesses, such as tax breaks and incentives, more needs to be done to address the challenges they face.

It is important for the government to continue to listen to the concerns of small business owners and take concrete steps to address their needs. By doing so, we can create an environment that enables small businesses to grow and thrive, leading to a brighter future for all South Africans.

As we look to the future, let us remember that small businesses are more than just economic engines. They are the embodiment of the entrepreneurial spirit, the ingenuity, and the hard work that makes this country great. And with the right support and resources, they can continue to drive us forward, creating jobs, growing the economy, and making a difference in the lives of countless individuals and communities across South Africa.