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SME SECTOR HEADING FOR COLLAPSE

28/02/2015 05:09:00 BY SIFISO SIBANDZE

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MBABANE – The hopes of the country’s Small and Medium Enterprises (SMEs) to pay less tax in the coming financial year were reduced when Minister of Finance Martin Dlamini ended his 6 333-word speech without mentioning any tax amendments for the sector.

Hopes were high in the country’s SMEs that the minister of Finance would slash their tax rates through introduction SME tax regime just like other countries in SADC and SACU.
SADC is Southern African Development Community while SACU is Southern African Customs Union (SACU).

What raised the SMEs hope was the fact that South Africa’s Finance Minister Nhlanhla Nene further relieved micro-businesses whose gross an nual turnover is less than E335 000.
All these businesses will not pay tax.

Small Enterprise Development Company (SEDCO) Managing Director Dorrington Matiwane has decried this move by government.
He strongly believes that the SME sector is heading to a total collapse.

Agreements

He said this would be more so because the new trade agreements in SACU, SADC and COMESA allow all the countries to trade free in these blocs.
With that scenario at hand, Swazi SMEs would face stiff competition from the others who are supported back in their countries, said Matiwane.
“The trade agreement allows SMEs from other countries to trade in any country in the blocs, therefore, our SMEs would not have the financial muscle to compete with their counterparts that are subsidised through paying less tax,” Matiwane said.

He went on to say that Swazi SMEs are burdened as they are compelled to pay tax even if they had made losses.
Matiwane said it is disturbing to see that government seems to be not listening to them as they had engaged them in this regard for several times.

The president of SMEs mother body, the Federation of the Swaziland Business Community (FESBC), said he was disappointed as they had hoped for better from the budget speech.