BUDGET 2024

Has it done anything to help Small Business?

Only the most optimistic among us would declare Budget 2024 a Small Business friendly budget!

The budget deficit is estimated to worsen from 4% to 4.9% of GDB this financial year, which means that debt service costs increase by R15.7 billion bringing the estimated total for the 2024 years to R356 billion.

So, what are the positives?

• Err, None really…
• Government Employees salaries going up to R251.3 billion
• Grant recipients will see an increase in their grants, which should directly stimulate local spending.

The negatives? 

• Rooftop Solar rebate has been killed.
• Sin Taxes – Excise duties on alcohol & tobacco increased by 7% on average
• Personal Tax brackets & Medical Tax credits will not be adjusted for inflation – so we all pay more taxes

Government has made no effort to support small business of the individual taxpayer with this budget, the clear facts are that business ownership for all entrepreneurs is going to carry more “penalties” and encounter more red tape than many might think the risks warrant!

So how can these penalties be mitigated? Once again, the best way is to ensure your business qualifies as a small business corporation (SBC) as this still allows for a little breathing room from the new tax increases.

How, may you ask?

The table below illustrates the different outcomes on R1 656 601 million profit and shows that being an SBC is still clearly the best option.

Income Type	PAYE	SBC Tax	Co Tax	Div. Tax	Total Paid
All Salary	R587 593	0	0	0	R587 593
SBC Mix Sal/Tax/Div.	R346 380	R58 289	0	R98 342	R503 011
Co. Mix Sal/Tax / Div.	R346 380	0	R154 000	R79 200	R579 580
SBC All Dividend	0	R58 289	R309 848	R257 692	R625 829
Co. All Dividend	0	0	R463 848	R238 551	R702 399

Our Services:

At SME.TAX we do more than just assist clients with tax planning.

We are your “one stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring.

For more information, please visit our website www.sme.tax or give us a call on 012 021 0829