The South African Breweries (SAB) announced yesterday it will help create thousands of jobs in South Africa and increase opportunities for entrepreneurs to become part of its supply chain through its key entrepreneurship programmes.
From rural entrepreneurs to big business, SAB has laid the foundation to support entrepreneurs and create a total of 10 000 jobs in South Africa by 2021 using its entrepreneurship programmes – SAB KickStart, SAB Foundation, SAB Thrive and SAB Accelerator, as well as its agriculture programmes to grow emerging farmers.
The company offers a comprehensive and holistic package of entrepreneurship support to develop small businesses from ideation to growth, transforming the supply chain, as well as investing in the potential of entrepreneurs in the broader community. Applicants to the programmes will go through a selection process.
Ricardo Tadeu, Zone President for AB InBev Africa and SAB, says: “We are committed to making a substantial contribution towards South Africa’s national agenda of growing the economy through creating jobs and reducing unemployment, particularly amongst our youth. As a business that started out as an entrepreneur itself, we strongly believe that entrepreneurship is the most appropriate response to this issue and will help to galvanise the economy.
“We recognise that job creation is top of mind amongst South Africans. As one of the country’s leading corporates with a deep sense of pride, and a belief in the future of our country, we have not only a responsibility to help, but a duty to improve the lives of people in communities. We will do this through a range of initiatives, including providing real, authentic and sustainable jobs that we can measure going forward,” says Tadeu.
The commitment to create 10 000 jobs is over and above the Public Interest Commitments (PIC) that SAB’s agreed last year with government after the business combination between AB InBev and SABMiller. Job creation is embedded in the company’s business strategy which focuses on fostering a better world where everyone has an opportunity to improve their livelihoods. The three key priorities of this strategy are job creation; promoting nutrition and health; and reducing harm caused by the misuse of alcohol.
“This is an important vote of confidence in South Africa and a commitment to improve the lives of its people, as well as to invest and participate in expanding the country’s economy,” says Tadeu.
Business Unity South Africa (BUSA) CEO Tanya Cohen says BUSA congratulates SAB on this welcome initiative. “Systemically supporting entrepreneurship opportunities within SAB’s supply chain will make a meaningful contribution to enterprise development and job creation – both of which are critical to transformation for inclusive economic growth,” she says.
Deputy President, Cyril Ramaphosa, in a message, commended SAB’s efforts in bring change to communities. “Your commitment as a corporate citizen to job creation, the empowerment of people and reduction of harm. Business and government can work together to create the better life that we seek to secure for all South Africans.
In the face of poverty, unemployment and inequality, your ambition to create 10 000 sustainable jobs is an important investment in our economy and society.
SAB’s focus on entrepreneurship is a commendable step towards inclusivity and sustainability in our economy and is one that will be rewarded with the unearthing of the energy and talents of those who will benefit from this programme.”
Edith Vries, Director General for the National Department of Small Business thanked SAB for the role it is playing in supporting entrepreneurs. “Small businesses are at the heart of economies that grow. Our young people need the experience and they need someone to give them an opportunity. I want to thank and salute SAB for providing that opportunity and helping them with that first step.
“I also want to commend SAB for the commitment to create 10 000 jobs over the next 5 years and of your entrepreneurship programmes that you are using to drive this objective. Through SAB’s leadership we can build a new cadre of entrepreneurs into the future.”
Barbara Creecy, Gauteng MEC for Finance, acknowledged SAB’s contribution to developing entrepreneurship and creating jobs in the province. “We recognise the role that SAB is playing in the economic development of the Gauteng province. The organisation’s entrepreneurship programmes are contributing to entrepreneurship development in the province. It is exciting to participate in launching an initiative that integrates all of these programmes across the value chain.
“SAB stands together with us in acknowledging that unemployment, poverty and job creation are the most important challenges facing our country today. Whether we are in government or civil society, we need to create meaningful opportunities to increase economic participation amongst young people.”
Driving the ambition to create 10 000 jobs is a call to action to all entrepreneurs through a mass media Entrepreneurship Campaign, beginning with a television commercial launched this past weekend. The commercial centres on the concept of how ‘One Idea’ can ignite and spark a nation to heed the call to try its hand at entrepreneurship in order to build a better South Africa for all.
“We believe in the power of one idea which is sparked within each entrepreneur and we are committed to supporting these businesses and the potential they hold to bring positive change in people’s lives. We back entrepreneurs 100%,” says Doreen Kosi, Vice President of Legal and Corporate Affairs at AB InBev Africa and SAB.
SAB also hopes in the future to call to action other corporates in South Africa to expand opportunities for real job creation.
‘We hope that our campaign and efforts in the entrepreneurship space will inspire others to support the creation of more jobs in South Africa,” says Kosi.
The SAB Entrepreneurship Programmes will visit six cities across South Africa during a roadshow in the month of October. Details will be available on SAB’s social media platforms.
SAB Entrepreneurship Programmes:
The programme has been running since 1995 and focuses on youth owned businesses. It is focused on investing in youth entrepreneurs between the ages of 18 and 35.
The programme backs black entrepreneurs with existing, emerging businesses in key industries that are aligned to supply chains.
There are two programmes within the SAB KickStart offering – SAB KickStart Boost and SAB KickStart Ignite.
SAB KickStart Boost is a supply chain readiness programme that’s built around a key objective: Enabling high potential youth owned business to become suppliers of various organisations in the private and public sector, thereby fast-tracking the transformation of the economy. We back entrepreneurs with existing, emerging businesses in key industries to be ready for and to access supply chains, and as a result grow into sustainable businesses that create jobs.
SAB KickStart Ignite supports disruptive innovators that have innovative businesses and products that have high potential to grow into viable businesses that can solve our business challenges and can grow to be future creators of employment. Eligible entrepreneurs receive technical product and business development support which includes one on one mentoring, prototyping, commercialisation, and financial support where required. SAB KickStart Ignite acts as a pipeline of entrepreneurs for more advanced programmes such as SAB KickStart Boost.
The SAB Foundation is an independent trust founded to benefit historically disadvantaged individuals and communities, primarily but not exclusively, through entrepreneurial development in South Africa. It is one of three beneficiaries of SAB’s BBBEE transaction, SAB Zenzele, established in 2010. Key beneficiary groups include women, youth, people in rural areas and people with disabilities.
The long term vision underpinning the SAB Foundation is to ignite a culture of entrepreneurship and social innovation in South Africa as a source of economic growth and a primary source of innovation and job creation.
The focus is on investing in entrepreneurs outside of the value chain and across the country with a particular emphasis on businesses outside major metropolitan areas.
There are two offerings for entrepreneurs within the SAB Foundation – the Social Innovation Awards and Tholoana Enterprise Programme.
The Social Innovation Awards invest in innovative business ideas that can solve social problems. This includes, but is not limited to energy, water, health, education, housing and food security. The Disability Empowerment Awards is a special category for innovation that benefits people with disabilities.
The Tholoana Enterprise Programme is a two year business support and capital grant programme to assist micro and small enterprises to grow and create jobs.
The SAB Thrive Fund is an Enterprise & Supplier Development (E&SD) Fund set up and funded by SAB to transform the company’s supplier base. The Fund has been established in partnership with the Awethu Project, a Black Private Equity Fund Manager and SMME investment company. The SAB Thrive Fund’s mandate is to invest in and transform SAB suppliers such that they become more representative of our country’s demographics. SAB Thrive Fund Investees benefit from 100% Black equity capital and business support.
The key objective of SAB Accelerator is to grow SAB’s supply chain to be inclusive of black-owned, especially black women-owned businesses. To achieve this an incubator consisting of 10 business coaches and 10 engineers, who are dedicated to growing these suppliers, has been created. SAB Accelerator will partner with the company’s suppliers and provide coaching and technical expertise, which in turn will help them understand the SAB landscape, its value chain and integrate them into our business. Simply put, SAB Accelerator is a team of people who are dedicated to help black-owned suppliers improve and grow their businesses and in doing so, create much needed jobs.
SAB’s agriculture initiatives
SAB and AB InBev Africa have committed to establishing thriving barley, hops, maize and malt industries in South Africa that strengthen rural employment and job creation, accelerate the development of emerging farmers and enable SA to become a net exporter of hops and malt by 2021. In addition, SA’s technological and innovation base will be strengthened to improve the productivity of emerging and commercial farmers and create new business opportunities. The company will invest R610-million during this period in developing the capacity of new emerging and commercial farmers and increase the amount of local barley that is malted. The strategic intent is to create at least 2 600 new farming jobs in SA.
3 Stealthy Tax Hikes Payroll Managers And Employees Need To Take Note Of
By Rob Cooper, tax expert at Sage, and chairman of the Payroll Authors Group of South Africa
“Dammed if you do and dammed if you don’t.”
The adage summarises the difficult decisions government and the Finance Minister faced when balancing the country’s books, rescuing state-owned enterprises, and reviving the growth of our economy. Given the economic pressure that most taxpayers are facing, government ideally needed to achieve all of that without direct increases to personal income tax in the most recent Budget Speech.
Personal income tax has comprised at least a third of South Africa’s total tax revenue in recent tax years, despite growing unemployment. The 2019 Budget, presented in February, forecasts that personal income tax will account for nearly 39% of tax collected during the upcoming (2019/20) tax year. Given that we are in an election year and that the tax base is fragile, it’s not surprising that the Finance Minister and the National Treasury avoided direct increases to the statutory tax tables used to calculate PAYE for employees in the budget.
Nonetheless, government has made inflation work in its favour to impose some tax increases by stealth. Here are three ways government is raising more revenue without direct tax increases:
1. Bracket creep
The statutory tax tables used by payrolls and employers have not been changed for 2019/20, nor have the brackets been adjusted for inflation. This effectively amounts to an indirect tax increase that will yield a revenue saving of approximately R12.8 billion for government’s coffers.
It is not unusual for government to use ‘bracket creep’ to effectively raise more revenue. But unlike previous tax years, even low- and middle-income earners are not getting much relief. Rebates and the tax threshold are being increased by small amounts to allow some relief, but many people this year will feel the pain as inflationary salary increases push them into a higher tax bracket.
2. Medical aid credit not adjusted for inflation
As proposed in the 2018 Budget, the Finance Minister did not apply an inflationary increase to the Medical Tax Credit, which allowed him to raise an extra R1 billion in revenue for the year. Surprisingly, these funds will be allocated to general tax revenue rather than ring-fenced for healthcare. In previous tax years, revenue generated from below-inflation increases on medical scheme credits was used to fund National Health Insurance (NHI) pilot projects.
There is still no clarity on how the NHI is going to be funded except for a general statement that the funding model is a problem for the National Treasury to solve, and that the principles of cross-subsidisation will apply. One wonders if any real progress will be made soon, given the fiscal constraints government faces.
3. Business travel deduction left untouched
The Budget leaves the per-kilometre cost rates used to determine tax deductions for business travel untouched. By not increasing travel rates to account for inflation, government effectively increases income tax collection at the cost of the taxpayer. This will be a blow for people who need to claim from their employers for business travel in their personal vehicles. This change has slipped through largely unnoticed and the budget does not provide numbers for the expected increase in tax revenue.
Amid political turmoil and uncertainty, the Finance Minister presented a balanced budget for 2019/20 that offers hope for the future along with some tough love. With government taking steps to accelerate economic growth and improve revenue collection, we should hopefully see a steady improvement in government finances, which will translate into less pressure on the taxpayer in future years.
SMEs: Staying On The Right Side Of The Taxman
Remaining SARS compliant can be a constant challenge for small- to medium-enterprises (SMEs), especially when they are trying to focus on growing their businesses and streamlining their operations.
EasyBiz Managing Director, Gary Epstein, says submitting taxes can be a seamless process that does not have to take up more time than is necessary. “If business owners understand what is required of them and they put a few processes into place to deal with their tax submissions properly, their lives will be so much easier.”
What are the top three considerations for SMEs when submitting tax returns?
“Firstly,” says Epstein, “SARS returns must be accurate and submitted in terms of the relevant Act. Secondly, returns should be submitted and paid on time to avoid unnecessary penalties and interest, and thirdly, business owners must follow up on queries issued by SARS. “Do not ignore these queries, act on them as soon as possible”.
What are the major SARS submission deadlines for SMEs?
Epstein points out that small business owners need to adhere to various tax deadlines, each with their own particular dates for submission. “It is important that business owners diarise the dates (and set advance reminders for themselves) and/or enlist the services of an accountant or financial adviser to help them keep abreast of requirements.”
Value-added tax (VAT)
VAT payments need to be submitted in the VAT period allocated to the business, according to various categories and ending on the last day of a calendar month. This may mean making payments once a month, once every two months, once every six months or annually, depending on the category.
Provisional tax should be submitted at the end of August (first provisional) and at the end of February (second provisional) – for February year-end companies.
In addition to submitting an annual reconciliation (EMP501) for the period 1 March to end of February for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF), employee tax, in the form of an EMP201 return, needs to be submitted by the seventh of every month.
When can SMEs get extensions and is it worth it?
Epstein says SMEs can apply for various extensions, but these are subject to the Income Tax Act and Tax Administration Act.
“It is best for SMEs to consult their tax professionals to get advice regarding extensions for their businesses.”
What is SARS not flexible about?
SARS is not flexible when it comes to late returns and late payments.
“I cannot stress enough how important it is for SME owners to ensure their tax returns are submitted on time. In this way, they will avoid the inconvenience and expense of additional fines and interest,” notes Epstein.
What skills do SMEs need in their organisations to be able to submit to SARS efficiently?
Business owners often don’t have the time or expertise to deal with tax submissions throughout the year. If the business cannot afford to employ a full-time accountant or financial services expert, it would do well to outsource its tax requirements to a registered tax practitioner.
“I would recommend that even if they are not submitting the tax returns themselves, business owners should have a broad understanding of the tax regulations and what is expected of them. There is a lot of helpful information on the various Acts and tax requirements on SARS’ website,” says Epstein.
How does the right software help SMEs remain SARS compliant?
SME’s (and their accountants’) jobs can be made easier by using reliable accounting software to calculate accurate VAT reports. These reports are only as accurate as the data entered into them, which means care needs to be taken when inputting data into the accounting programme. Epstein says a good accounting software package must be reliable, easy to use and functional.
“SMEs need to check that the software has thorough reporting capabilities and can interface with other software solutions. Of course, it is also important to find out whether the software is locally supported by the vendor or not.”
4 Dangers Of Business Under-insurance
A common short-term insurance peril that many SMEs face when submitting a claim following an insured event is the risk of being underinsured.
Malesela Maupa, Head of Products and Insurer Relationships at FNB Insurance Brokers says, many small business owners mistakenly believe that by merely having a short-term insurance policy in place they are adequately protected against unforeseen events.
“This is technically correct provided that the business is covered for the full replacement value of the items insured. However, in circumstances where the sum insured does not cover the full replacement value or material loss of the item insured, the business is underinsured,” explains Maupa, as he unpacks the dangers of business underinsurance:
1. Financial loss
The most common risk is financial loss on the part of the business. If the business is underinsured or the indemnity period understated, the short-term insurance policy will only pay out the sum insured for the stated indemnity period as stated in the schedule, with the business owner having to provide for the shortfall. This often leads to cash flow challenges, impacting profit margins or rendering it difficult for the business to recover following the financial loss.
2. Reputational damage
Should an underinsured business not have sufficient funds to replace a key business activity or critical component following a loss, this may impact its ability to fulfil its contractual obligations, leading to a loss of business or market share, and irreparable reputational damage in the worst-case scenario.
3. Legal action
A small business also faces the risk of customers or clients taking legal action against it, should it fail to deliver on goods and services following a loss or be unable to honour its financial commitments that they committed to prior to the loss.
4. Survival of the business
A catastrophic event such as fire, which could result in the loss of stock or company equipment and documentation, could threaten the survival of a small business that is not yet fully established, if the business assets are not adequately insured.
Working with an experienced short-term insurance broker or insurer is essential when taking up short-term insurance to ensure that business contents are covered for their full replacement value.
Furthermore, depending on the nature of the business or item insured, the policy should be reviewed on a regular basis to avoid underinsurance as the value of items often change overtime due to fluctuations in economic activity. Where it’s necessary, evaluation certificates need to be kept up to date.
“Lastly, SMEs should ensure that the sum insured does not exceed the replacement value, which would lead to over insurance. Should a business submit a claim following a loss, the insurer would only pay out the replacement value, regardless of the higher sum insured,” concludes Maupa.
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