Small, Medium and Micro Enterprises (SMMEs) can take heart from the Coronavirus Debt Relief Fund and other measures that the South African government is putting in place to help them weather the economic storm of the Coronavirus outbreak.
Promises of increased assistance to SMMEs are making the situation considerably less bleak than it could have been. By listening to experts, relying on solid science and learning from nations that have gone before and not acted fast enough, South Africa implemented lockdown and taken its pain early, instead of standing idly by as the tsunami heads for our healthcare system.
The Minister of Small Business Development, Khumbudzo Ntshavheni, has said that all small businesses are eligible to receive financial aid, across all demographics – quelling rumours that the fund was set up solely for majority black-owned businesses. The principle, according to the Minister, is that the fund will have a demographic, as well as geodemographic spread.
The criteria include:
• A business must be wholly owned by South African citizens.
• It must employ at least 70% South African nationals.
• It must be registered with the South African Revenue Service (SARS) and tax compliant.
• Priority will be given to businesses owned by women, young people and persons with disabilities.
When announcing the 21-day lockdown, the President also said that tax-compliant businesses with a turnover of less than R50 million per annum would be allowed to delay 20% of their PAYE over the next four months, and a portion of their provisional corporate income tax over six months. This could help more than 75 000 businesses, but we await further details about the practical implication of it all.
Despite the understandable lack of detail so soon after the announcements, these are all positive steps that could make a significant contribution to assisting SMMEs in getting through the next few months.
For more information here are three of the latest articles about the President’s ‘solidarity fund’: (Just click on the title below.)