Much has been said in recent years about increasingly taxing the wealthy in what would make the likes of Robin Hood feel quite proud to be South African. Many supporters of this theory believe the wealthier one is, the more tax one should pay, even disproportionately so. Others hold the view that one should not be taxed beyond proportion merely as ‘punishment’ for building personal wealth. It is evident that tax in South Africa is on a rapidly increasing trajectory, and perhaps desperately so. Could the main motivation behind this be that the South African government is seriously running out of money to spend, with the consequential first port of call being the law-abiding soft target, a.k.a. the South African taxpayer?
In the past week’s live CPD event, we pondered the era of the small entrepreneur in South Africa. Our speaker, Mr Hiten Keshave CA(SA) MBA, who also assists and mentors young entrepreneurs in South Africa, led us through his thoughts on what it really takes to be a small entrepreneur in this country and how to overcome those stumbling blocks in the way of the success of so many start-up businesses in South Africa. The session was very insightful and the takeaway meaningful.
The importance of networking stood out and how vital the application of a high level of emotional intelligence is when establishing an initial support network for the start-up SME. This requires the entrepreneur to identify all the stakeholders of the SME, and to meaningfully interact with them in establishing credibility and confidence needed to invest in and support the start-up business. Part of this communication is the design of a convincing, logical, and, most importantly, comprehensive business plan that identifies the entity’s business model, and provides the roadmap that the SME will follow to achieve its goals. The discussion also highlighted the important role that accountants can play in supporting start-up entrepreneurs in reaching all these vital milestones! The recent SAICA blueprint that was released to the media about the envisaged role for SAICA members in building the South African economy also comes to mind.
Many, if not most, first-time entrepreneurs are held back by fear of failure. There are many South African individuals with inextinguishable entrepreneurial spirit and promising business ideas, but who remain in the dream phase, which is nothing other than a comfort zone. South Africans need not only be sufficiently empowered but also motivated and inspired to realise that the country’s economy actually needs them to abandon their comfort zones and embark on a proverbial entrepreneurial mission of killing many birds with one stone!
Consequentially, one such ‘bird in danger’ would naturally be the shrinking South African tax base, where seven million South African taxpayers, or 10,8% of the population, currently unsustainably sustain the national population of approximately 65 million residents. If we could prioritise the support given to start-up and other SMEs in our country by government and all other stakeholders, perhaps there would be light in the tunnel for our bruised economy. Not only would an increased tax base to fund governmental spend be noted, but most importantly, more wealth among general South Africans through their increased economic participation.
To learn more about what was discussed in our session, please enrol for the recorded CPD event “The era of the small entrepreneur: finding opportunities to expand the SA economy” by clicking below: