Pretoria: KwaZulu-Natal MEC for Economic Development and Tourism Mike Mabuyakhulu says emerging Small Medium Micro Enterprises (SMMEs) should be afforded tax breaks to establish themselves and find their feet before being taxed.
Mabuyakhulu was addressing South African and international business delegates at the 37th International Small Businesses Congress in Sandton, Johannesburg, on Monday.
“The government must play its role in the South African economy as an enabler and catalyst, and also intervene where necessary in order to establish a conducive environment for the development and growth of SMMEs in the country.
“The failure rate of SMMEs is high, but this could be reduced if they were to be exempted from the government administered prices.
“We need to give emerging SMMEs a tax holiday to afford them an opportunity to find their footing before they are subjected to the taxation,” said Mabuyakhulu.
He said the government should also consider providing relief to SMMEs by reducing import tariffs on the key inputs that they import for their businesses.
Mabuyakhulu was part of a panel that included Gauteng MEC for Economic Development Nkosiphendule Kolisile and Mpumalanga MEC for Economic Development Norman Mokoena.
The panel was leading discussions on the topic, ‘Making room for small business – government action to remove barriers to entry arising from, inter alia, dominance of the economy by large firms, state-owned enterprises and other entry barriers’.
Mokoena said the R850 billion infrastructure development programme undertaken by government should benefit the country’s SMMEs significantly.
He further said the programme should provide an opportunity for enhancing the skills and technical capabilities of entrepreneurs.
Mokoena cited the Kusile Power Station as an example of how state-owned enterprises can contribute to empowering SMMEs, particularly those owned by women, youth and the disabled.
“More than 200 companies are currently participating in the project, to the tune of R1.5 billion. We are doing everything to ensure that state-owned enterprises play a developmental role,” said Mokoena.
The International Small Business Congress ends today with a presentation of the ISBC 2012 Declaration.