BUSINESS NEWS - Ahead of the Budget statement on Wednesday, the South African Informal Traders Alliance (SAITA), which represents over 2 million informal and micro businesses across South Africa, says that it is imperative that Government stop thinking of informal and micro businesses as beggars requiring hand-outs, but rather to start thinking of them as strategic partners who are able to contribute meaningfully to the economy, and to the creation of jobs.

Rosheda Muller, National President of SAITA, says: “Government needs to amend its perception and thinking in respect of our sector. 

"We don’t need hand-outs, but require help with skills development, mentorship, urgent removal of red tape and a budget that is sensitive to the critical role that we play in the economy and in job creation. Rethinking their approach to our sector is in the interest of the country and the economy.

“People who run informal or micro businesses are inherently motivated to succeed. They are hard working self-starters who, with the appropriate training, skills development and business environment, can play a larger, more valuable role in the economy.”

Removal of red tape to allow informal and micro businesses to prosper and grow has long since been on SAITA’s agenda.

“We have said this before and will say it again: Government needs to urgently develop an action plan to remove the red tape and barriers that are impeding our growth. The informal sector and micro businesses need to be recognised and respected as the foundational incubator for entrepreneurship and job growth. Too often our sector is sidelined and victimised, which is exceptionally disparaging, especially if you consider that we contribute a third of total employment in the country,” says Muller.

“Our recommendation is that an urgent task team be constituted to unblock the impediments to growth in the informal and micro business sector. This task team should include the Presidency, the Department of Small Business Development and National Treasury.

“We also want the Minister of Finance to think deeply about the informal and micro business sector and the potential we bring, prior to the Budget. Besides the removal of red tape, and facilitating an environment that fosters and incubates growth, we cannot have excessive tax increase on products that we sell. Our customers are already under significant financial pressure.

“The most common products sold in the sector are fruit and vegetables, dairy products, chips, sweets, cold drinks, cigarettes and other tobacco products. We believe that one of the proposals on the table is to apply VAT to some VAT-exempt products, yet some of these products are staples for the informal and micro sector, as well as for poorer consumers.

“These products are the lifeblood of our trade, and therefore, excessive price or tax increases impact our ability to trade and survive in business. This is especially true for tobacco products in the context of an ever-growing illegal market. This is especially in the context of an ever growing illegal market which also results in less taxes collected by National Treasury.

Commenting on proposed excise on e-cigarettes, Muller said: “There’s been speculation that the Minister will announce an excise on e-cigarettes. On many occasions we have mentioned the need for tobacco harm reduction products to be affordable and accessible to our members and their customers. 

"There needs to be a significant gap between the excise on tobacco harm reduction products and cigarettes."

SAITA on Budget: Informal sector, micro-traders need a leg-up, not a hand-out

• Informal sector and micro businesses contribute a third of total employment in SA
• Sector wants help with skills development, mentorship, urgent removal of red tape and a Budget that is sensitive to the critical role they play in the economy, and in job creation
• Calls for urgent task team (Dep Small Business, Treasury, Presidency, SAITA) to expedite initiatives and unblock challenges for growth of informal and micro businesses

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