Micro and small businesses have received welcome regulatory and tax-free threshold breaks in Finance Minister Pravin Gordhan's latest budget.

Micro businesses (with an annual turnover below R1m) will from March 1 have the option of paying turnover tax, value-added tax and employees' tax at twice-yearly intervals.

The budget review document said it was further envisaged that a single combined return would be filed on a twice-yearly basis from March 1 2013. The number of returns required for these taxes will fall from about 18 per year to only two a year in 2013.

However, the Treasury warned qualifying taxpayers that the build-up of tax liability would require taxpayers "to ensure that funds are available when payment is due".

To encourage small incorporated businesses, the budget review said the tax-free threshold of such companies would increase to R63556 from R59750. It also said taxable income of up to R350000 would be taxed at 7%, up from the current threshold of R300000 at 10%.

For taxable income above R350000, the normal corporate tax rate of 28% applies.

Meanwhile, the Treasury also said that legislation was being explored to introduce special economic zones that will build on policy regarding industrial development zones.

It will 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.