Less red tape for small businesses

2012-02-23 00:00

MICRO and small businesses have been spared the red tape and will also receive more tax-free breaks.

This was among the measures announced by Finance Minister Pravin Gordhan yesterday to make doing business easier for the small guy.

Micro businesses (with an annual turnover below R1 million) would from March 1 have the option of paying turnover tax, value-added tax and employees’ tax at twice-yearly intervals.

It was envisaged that a single combined return would be filed on a twice-yearly basis from March 2013, according to budget documents.

The number of returns required for these taxes would fall from a total of 18 a year to two in 2013.

To encourage small incorporated businesses, the budget review said the tax-free threshold of such companies would increase to R63 556 from R59 750. Taxable income of up to R350 000 would be taxed at seven percent, up from the current threshold of R300 000 at 10%.

For taxable income above R350 000, the normal corporate tax rate of 28% would apply.

On special economic zones, of which several are earmarked for KZN, Gordhan pledged to look into a possible reduction in the headline corporate income tax rate for businesses in selected zones, an income-tax exemption for the operators of such zones, and an additional deduction from taxable incomes for the employment of workers earning below a predetermined threshold.

On Tuesday Premier Zweli Mkhize told the KZN Legislature the arrangement offered an opportunity for small business development through various packages including incubation, mentorship, access to micro finance and markets. — Witness Reporter.

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