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Article by: Hartebeespoort Accountant: Maritza Eybers


Only the most optimistic among us would declare Budget 2023 a Small Business friendly budget!

There are however those who make the point that it could have been worse, so maybe we should celebrate none the less.

So, what are the positives?

  • Renewable Energy Assets – 125% deduction of the cost of the asset
  • Solar PV Panels – Individuals receive a 20% tax rebate capped at R15 000
  • Net tax relief of R5.2bn for 2023.
  • Tax brackets were increased by inflation, to account for bracket creep.
  • Company Taxes reduced to 27% from 1 April 2022.
  • Tax as a % per litre of fuel remains unchanged

The negatives?

  • Sin Taxes – Excise duties on alcohol & tobacco increased by 4,9%
  • Fuel Levy and Road Accident Fund – no changes
  • Sugar Tax – increase by 2,3 cents per gram of sugar, delayed until 1 April 2025

Despite the pro small business rhetoric from Government, the clear facts are that business ownership for all entrepreneurs is going to carry more “penalties” and encounter more red tape than many might think the risks warrant!

So how can these “penalties” be mitigated? The best way is to ensure your business qualifies as a small business corporation (SBC) as this still allows for a little breathing room from the new tax increases.

How, may you ask?

The table below illustrates the different outcomes on R1 817 001 million profit / salary and shows that being an SBC is still clearly still the best option.

Income Type PAYE SBC Tax Co Tax Div. Tax Total Paid
All Salary R644 489 0 0 0 R614 192
SBC Mix Sal/Tax/Div R251 258 R57 698 0 R180 280 R489 236
Co. Mix Sal/Tax/Div R251 258 0 R258 957 R140 029 R650 244
SBC All Dividend 0 R57 698 R342 090 R283 433 R683 231
Co. All Dividend 0 0 R490 590 R265 282 R755 872

At SME.TAX we do more than just assist clients with tax planning, we are your “one-stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring.

For more information, please visit our website or give us a call on 072 207 4789