RELIEF FOR SMALL, MEDIUM & MICRO ENTERPRISES

RELIEF FOR SMALL, MEDIUM & MICRO ENTERPRISES

A variety of new initiatives have been introduced to assist SMMEs affected by the Covid-19 pandemic. We provide a summary of your various options below.

Please note that responses to Covid-19 change and develop daily. The information below is current as of 31 March 2020.

Overview

Forms of relief available to SMMEs specifically are:

  • The Debt Relief Finance Scheme – assists SMMEs negatively affected by the C19 pandemic
  • Business Growth/Resilience Facilities – assist SMMEs who may be able to supply goods or services in relation to the C19 pandemic
  • Tourism Relief Funding – assists Micro-enterprises in the sector negatively affected by the C19 pandemic
  • Delayed tax liability – lessens financial burdens on SMMEs with an annual turnover of ≤ R50 mil.

We note that businesses involved in Sports, Arts & Culture will also be receiving dedicated relief from the Department and its agencies. Although this relief is not specific to SMMEs, many will be beneficiaries.

We provide more detail on each form of relief, as well as how to access them, below.

Am I a Small, Medium or Micro Enterprise?

For the purposes of accessing Covid-19 dedicated relief, it may be necessary for you to work out whether you are in the SMME category at all and, if you are, whether you qualify as a Micro-enterprise. The tables below will assist you to determine how your business is categorised. 

SMMEs are defined by the National Small Enterprise Act. Determining factors are twofold: Total number of full-time employees and total annual turnover:

Number of Employees (All Sectors)
Micro Small Medium
1 – 10 11 – 50 51 – 250
Annual Turnover (Per Sector)
Sector Micro Small Medium
Agriculture ≤ R7 mil. ≤ R17 mil. ≤ R35 mil.
Mining and Quarrying ≤ R15 mil. ≤ R50 mil. ≤ R210 mil.
Manufacturing ≤ R10 mil. ≤ R50 mil. ≤ R170 mil.
Electricity, Gas & Water ≤ R10 mil. ≤ R60 mil. ≤ R180 mil.
Construction ≤ R10 mil. ≤ R75 mil. ≤ R170 mil.
Retail, motor trade and repair services ≤ R7.5 mil. ≤ R25 mil. ≤ R80 mil.
Wholesale ≤ R20 mil. ≤ R80 mil. ≤ R220 mil.
Catering, accommodation and other trade ≤ R5 mil. ≤ R15 mil. ≤ R40 mil.
Transport, storage and communications ≤ R7.5 mil. ≤ R45 mil. ≤ R140 mil.
Finance and Business Services ≤ R7.5 mil. ≤ R35 mil. ≤ R85 mil.
Community, Social and Personal Services ≤ R5 mil. ≤ R22 mil. ≤ R70 mil.

How to Qualify and Apply

Not all qualifying criteria and application processes have been detailed yet. Here’s what we know thus far.

The Debt Relief Finance Scheme and Business Growth/Resilience Facilities are initiatives of the Department of Small Business Development. Online applications in respect of both will launch on 2 April 2020 and will be available at: www.dsbd.gov.za / www.sefa.org.za / https://seda.org.za.

To access DSBD assistance your business must be registered with CIPC and the National SMME Database (https://smmesa.org.za). You must be SARS and UIF compliant. The Small Enterprise Development Agency will assist Micro-enterprises that wish to become complaint (email: debtrelief@seda.org.za / growthfund@seda.org.za).

Businesses must be 100% South African owned, with 70% South African employees. Priority will be given to businesses owned by women, youth and people with disabilities. There is no requirement in respect of B-BBEE ownership, as was previously reported.

For a simple guide to each, as well as a list of required supporting documentation, visit:

Tourism Relief Funding is an initiative of the Department of Tourism. The application process has not yet been publicised. Qualifying criteria have been stated by way of a media statement, however, we do not consider these set in stone at this point. It seems that relief will be aimed at Micro-enterprises (≤ R2.5 mil. annual turnover) operating businesses in the accommodation, hospitality and travel spheres.

Tax measures

SMMEs with an annual turnover of R50 million or less will be able to delay payments to SARS without incurring penalties or interest. More specifically, you may:

  • Delay payment of 20% of PAYE in respect of April to July 2020. Repayment must commence as of August 2020 with what’s owed being paid-off in equal instalments for the following 6 months.
  • Delay payment of a portion of corporate provisional income tax for 6 months, with first and second payments post April 2020 calculated at 15% and 65% respectively.

The specifics relating to these tax measures will still be fleshed-out by Treasury and SARS, with draft legislation to be published for public comment in April 2020.

SMMEs will also benefit from generally available C19 tax measures:

  • A tax subsidy of R500.00 p.m. in respect of every employee earning less than R6,500.00 p.m. This subsidy may be claimed for 4 months: 1 April 2020 to 31 July 2020.
  • Monthly tax reimbursements (as opposed to the usual bi-annual reimbursements)