Govt to review business incentives
Incentives will be assessed to determine their effects on economic growth.
|||Pretoria - Government is set to review business-support initiatives over the next three years.
This is in a bid to assess their effects on economic growth - which is now projected to hit just 1.5 percent this year - as well as on productivity, competitiveness, the balance of trade and employment, National Treasury explains.
The department notes that the state provides a “range of business support incentives, including direct transfers and tax incentives”.
National Treasury adds, to promote transformation, government has reformed the broad-based black economic empowerment legislation, as well as state procurement legislation.
As part of its bid to ensure value for money is achieved through the billions of rands the state procures each year, it has also set up a dedicated office to scrutinise tenders. The Chief Procurement Officer is also meant to cut down on corruption when it comes to tenders being awarded.
Government will also provide support to 200 businesses with high-growth potential to be selected under the Department of Small Business Development's Gazelles programme.
National Treasury also notes, if each metro were to adopt good practices around construction permits, getting electricity and enforcing contracts, they would surpass the average performance of high-income members of the Organisation for Economic Cooperation and Development .
It bases this on the Doing Business 2015 report for South Africa, which was produced by the World Bank on behalf of the National Treasury, Department of Trade and Industry, South African Cities Network and nine urban centres.
Local firms evaluated performance across six indicators. The survey found South African entrepreneurs face different regulatory hurdles depending on where they establish their businesses.
Across the nine participating cities, it is easiest to start a business in Ekurhuleni, Johannesburg and Tshwane; deal with construction permits in Cape Town; get a commercial electricity connection and enforce a contract in Mangaung; and register property in Johannesburg.
“There is no relationship between the size of the city and the rankings, and no single city performs equally well on all indicators.”
The results suggest well-targeted administrative improvements that do not require legislative changes can make a difference for small or medium-sized firms, it says.
IOL