Tax relief for small businesses

There's some good news in the Budget for qualifying small business corporations and so-called "social impact firms."

28 Feb 2013

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 7.0% up to R365‚000‚ at 21% up to R550‚000 and at 28% above R550‚001.

According to the Budget Review document‚ the application of the same rate structure to the trading activities of public-benefit organisations (PBOs) "will also be explored."

It said the feasibility of special support for social-impact businesses, which have both profit-making and social objectives‚ was being explored.

"Encouraging investment in such businesses in line with the policy objectives of small business development‚ social solidarity and job creation‚" the Budget Review said.

In a related development‚ it has been proposed to allow donations of more than 10% of taxable income in any given year‚ to be rolled over as allowable deductions in subsequent years.

Also under consideration‚ said the Budget Review‚ are rules governing the amount of funding that must be distributed where PBOs provide funding to other PBOs.

Source: I-Net Bridge

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