Black Business Council urges government to pay small businesses overdue invoices

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The Black Business Council (BBC) has called on President Cyril Ramaphosa to ensure that government departments pay small and medium business overdue invoices.

The President met with Business lobby groups on Friday afternoon to solicit their views on what he should cover ahead of the State of the Nation Address.

The BBC says the country needs to create a new breed of black billionaires.

It is the first time that the President met with the BBC. Its CEO Kganki Matabane says they used this opportunity to draw the President’s attention to the challenges faced by black small businesses because of the failure of government to pay businesses on time.

“There are a lot of small businesses that closed shop mainly because they have not been paid for the last 5 years or so. So, we’re calling for the president to say can’t we give this an ultimatum of about 6 months and tell all the ministers that by the end of six months, I want all invoices paid! because the impact of that is very, very serious on small businesses.”

Cash-based invoicing system

Matabane says the council has approached the South African Revenue Services (SARS) requesting it to change the current cash-based invoicing system to give allowance to small businesses to trade in the event that payments from the government are late.

“As soon as you issue an invoice you owe SARS. If you owe SARS immediately but the government pays you after six months, it means that even your tax clearance certificate that is valid for a day will expire and you won’t be able to do business with the state and other businesses because they also want a tax clearance certificate,” Matabane explains.

“We have engaged with SARS on this matter to say, perhaps SARS should go back to what used to be for small businesses not for everyone. For small businesses, your tax clearance certificate will expire in 6 months so that even if you’re not paid for 2 months you can still be able to trade,” BBC CEO proposes.

The Black Business Council says it called on the President to speed up the signing of the public procurement bill to which the Minister of Finance promised that bill will be fast-tracked.

Equity funding

Among other issues that the council raised is the need for implementation of plans and the need for equity funding for businesses owned by youth, women and persons living with disabilities.

“We made a proposal that why can’t we take all those enterprise development funds from all the companies and put them in a fund similar to a solidarity fund that will be managed by both government and business. That fund will specifically be utilised for funding black businesses, small businesses to help them with their own contribution,” suggests Matabane.

Matabane is confident that the solution put on the table will go a long way in creating a new breed of black billionaires in the country.

“The last ones that were created, we created during the time of President Thabo Mbeki. Since then we have not created black billionaires. Those who were created that time they’re now retiring, we need a new layer of black millionaires and black billionaires and that can only be made possible when there’s a fund to assist them,” BBC explains.

With these proposals put in front of the President’s desk to peruse and make a determination, it remains to be seen how many of them will make it to his State of the Nation Address for 2022.