Businesses Can Expect Even Tougher Environment After Budget Speech

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With the nation anticipating what the Minister of Finance will say during the National Budget Speech on Wednesday, February 20, businesses are hoping for some relief in the form of a halt on corporate tax increases. But the reality is businesses may face even more financial burdens, Stefani du Preez, Director of Innovative Accounting Solutions (IAS) says.

 

“Minister Tito Mboweni will be under a lot of pressure to introduce plans of growing a stalling economy. This at a time when even the World Bank has estimated our GDP growth at 1.3%, a drop from the last year’s estimate of 1.8% in June. This might mean asking for businesses to fork out even more money in taxes.”

 

“A lot of companies, especially the Small Medium and Micro Enterprises (SMME) have stated that the corporate tax of 28% plus 15% VAT already makes doing business in South Africa expensive, couple this with erratic power outages, a hike in fuel levies, the funding of free education in the institutions of higher learning and you realise the need for businesses to be able to save wherever they can,” du Preez says.


She says having an understanding of what the upcoming National Budget Speech entails and getting ahead of the curve can set the tone for businesses for the rest of the year. 

 

“When companies outsource their taxation and financial accounting needs to Innovative Accounting Solutions, we ensure that companies can save up to 60% on operational costs. This increases cash flow and frees employers to focus on working on their businesses and not in them – separating an “employee” mindset from an entrepreneurial approach,” du Preez says.

 

Innovative Accounting Solutions, a subsidiary of Innovative Solutions Group TM, offers a range of outcomes in managing finance and accounting processes, with the consulting division ensuring your company will not pay one cent more on tax than they are obliged to.

 

“By outsourcing finance and accounting procedures to Innovative Accounting Solutions, companies have found they can access resources and best practices otherwise beyond their reach. Innovative Accounting Solutions assists your company in developing better benchmark and baseline financial processes to help your company meet all its regulatory requirements,” du Preez says.

 

A recent study by Sage found that South African companies lost over R 231 per second, or a total of 1 day, 19 hours, due to admin burdens with accounting (20%) and generating invoices (17%) taking up the bulk of the productive time.

 

The study further states, 15% of invoices in South Africa are paid late and more than 8% of payments due to the country’s Small and Medium Businesses are never made or made so late that businesses are forced to write them off as bad debt.

 

“South African companies are already under a lot of financial pressure, having to deal with accounting admin shouldn’t be another hurdle they have to face. Whilst some businesses are hedging their hopes on tax relief to be announced by the Minister during the National Budget Speech, the most practical way of generating revenue is for those businesses to be more productive with their time, and Innovative Accounting Solutions is already offering this as a solution,” du Preez concludes.

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