Myths and Facts about B-BBEE
- Karen Mullaney
- Jul 4, 2023
- 2 min read
There is many misconceptions about B-BBEE and how it affects your business.
Let's clarify some myths on the subject.
1. I am a small business; I don't need B-BBEE.
No, depending on your client requirements, irrespective of the size of your business your client might request your business to be B-BBBEE Compliant.
A small business with an Annual Turnover of R10 million will be classified as an Exempt Micro Enterprise and only requires signature of the B-BBEE Affidavit by a Director and Commissioner of Oath. Download the prescribed Template here.
A medium business with an Annual Turnover from R10 million to R50 million, where the business is more than 50% Black Owned only requires the signature of to the B-BBEE Affidavit by a Director and Commissioner of Oath. Download the prescribed Template here.
2. I need to give away or sell ownership of my business to "Black (African, Coloured or Indian) to become BBBEE Compliant.
No, depending on the category of the business e.g. EME, QSE or Generic, 90% of businesses does not need Black Ownership.
An EME classified business is automatic Level 4 with no Black Ownership.
3. There is no benefit for spending any money on B-BBBEE initiatives to become compliant.
No, clients would benefit on the below elements, if correctly implemented.
3.1 Procurement:
Your client will benefit on their B-BBEE Scorecard with your level. The Higher your scorecard level, the more benefit your client obtains.
Level | Points on Scorecard | Recognition percentage |
1 | > 100 points | 135% procurement |
2 | 85 - 99.99 points | 125% procurement |
3 | 75 - 84.99 points | 110% procurment |
4 | 65 - 74.99 points | 100% procurement |
5 | 55 - 64.99 points | 80% procurement |
6 | 45 - 54.99 points | 60% procurement |
7 | 40 - 44.99 points | 50% procurement |
8 | 30 - 39.99 points | 10% procurement |
3.2 Skills Development:
Companies can be awarded funding from the respective SETA which they are registered with and Companies can claim the Tax Incentive from SARS for learnerships.
Download the Tax Incentive for Learnership Guide from SARS below.
3.3 Socio-Economic Development:
Companies can claim the full 100% contribution for Socio-Economic Development from SARS.
If you require a Socio-Economic Development beneficiary, kindly consider The Evelyn Foundation. Please reference our company as a referral for the Foundation. All documentation and information are below for downloading.
4. B-BBEE is expensive and the company cannot afford to become compliant.
We offer affordable consultation services for all category of companies e.g. EME, QSE and Generic.
Our Advisory services includes assistance with the Employment Equity, Enterprise Development, Skills Development and Socio-Economic Development.
Contact us to assist in streamlining your B-BBEE scorecard and Verification process.
Karen Mullaney
076 161 0015
info@kmconsultant.net
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