Sanlam Business Market’s marketing head, Kobus Engelbrecht, says the budget included some tax proposals that will have an impact on business owners, including the tax incentives announced for certain special economic zones.
The tax incentives include:
- A 15% corporate income tax rate for businesses in these areas
- An employment incentive allowing a tax deduction for employment of workers earning less than R60 000 per year
- An accelerated depreciation allowance for buildings in these areas, based on the existing regime for urban development zones – in order to encourage developers to invest more in industrial premises.
Engelbrech says government’s intention is clearly to stimulate business activity in these areas and business owners should seriously consider making use of these opportunities.
Cor Kraamwinkel, associate director, International Tax, at Pricewaterhouse Coopers says the incentives for special economic zones may prove a useful incentive in the job creation drive and regeneration of certain targeted zones.
The CEO of the South African Chamber of Commerce and Industry, Neren Rau, welcomed the promise of negotiating tax incentives in the special economic zones.
New tax brackets
Government proposes that the R14 million turnover threshold for small business corporations be increased to R20 million and that the graduated tax structure for such corporations are revised as follows:
Engelbrecht advises business owners to seek advice from reputable tax advisers to find out if and how they can utilise these rules to their advantage.
Kraamwinkel says the increased threshold is welcome in that it will incentivise small businesses and stimulate this industry.