Budget 2017? Not interested in all the fluffy stuff, what the story is with internal politics or Molefe, quite honestly, not even interested on how it will be spent. What I am interested in, is how it will affect the small business owner and the entrepreneur. If we can sort them out, they will sort our economy out.
So how did #budget2017 go for the entrepreneur? I have 2 points to comment on.
Taxing the “rich”
All the media sources are referring to the “rich”, so let me do the same. Although I’m not convinced that you can be called “rich” just by there mere fact of earning more than R1.5m per year.
Anyways, so if you earn more than 1.5m a year, you will now be placed in a new bracket and will pay tax at 45%. By the way, the highest tax bracket since 1994.
Some commentators are saying that this is OK because we are now getting aligned with some of the first world countries. I don’t agree. In those countries, you pay a high tax, but you get the best education, the best medical care, you don’t need to spend thousands to secure your home and hundreds for a security company to protect it. I wonder what the real tax percentage in SA is, when you include everything we pay that should technically come from government. Much much much more than other countries.
I understand where government is coming from – Robin Hood approach. Tax the rich and give it to the poor. There are two issues: one, a good portion of the money never reach the poor and is abused by government corruption. And two, at what point are entrepreneurs saying, screw this and just move their business abroad.
I don’t agree with this. Let’s empower entrepreneurs. Let’s create a community where success breads more success. Not one, where you penalise the most successful in the short term and lose all the great stuff that can be done over time.
Oi! Not a single new tax break or incentive for small businesses. Not a single thing to encourage entrepreneurship, other than money allocated to help SME’s through government programmes which haven’t delivered anything meaningful to date.
In an economy where we need entrepreneurs more than ever, we don’t give them a single incentive to start or build businesses.
Nothing more to say, just Oi! The moment government understands the power of entrepreneurship, we will be able to create a better economy. Until then, let’s celebrate 1.3% growth. Pffffft.