More tax relief in budget for small businesses
THERE was some good news in Finance Minister Pravin Gordhan’s 2013-14 budget on Wednesday for qualifying small businesses and so-called "social impact firms".
Their turnover threshold has been raised to R20m from R14m and the graduated tax structure has been revised.
No tax will be payable on annual income below R67,111. Tax will be levied at 7% up to R365,000, at 21% up to R550,000 and at 28% above R550,001.
According to the budget review, the application of the same rate structure to the trading activities of so-called public-benefit (non-profit) organisations "will also be explored".
It said also being considered was special support for social-impact businesses that have both profit-making and social objectives.
"Encouraging investment in such businesses is in line with the policy objectives of small-business development, social solidarity and job creation," the review said.
A related proposal is to allow donations in excess of 10% of taxable income in any given year to be rolled over as allowable deductions in subsequent years.
Also under consideration, according to the budget review, are rules governing the amount of funding that must be distributed where public-benefit organisations provide funding to other such organisations.
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