Budget 2025 | Urgent calls for support measures for SMEs from Godongwana

Finance Minister Enoch Godongwana must provide clear, practical measures in his 2025 Budget Speech that will create a more enabling environment for small and medium enterprises (SMEs).

This is according to Shawn Theunissen, founder of Entrepreneurship To The Point (ETTP) and Property Point.

He said that SMEs continue to be the backbone of the South Africa's economy, but these entities continue to face systemic barriers that hinder their growth.

Theunissen has urged the National Treasury to prioritise SMEs in the Budget with tangible, actionable policies that directly support small businesses in line with the priorities identified in President Cyril Ramaphosa’s recent State of the Nation Address (SONA). 

Key policy priorities for SMEs in the 2025 Budget

Meaningful tax reform

Theunissen notes that one of the key issues for the Budget is whether there will be a tax rate hike, or will it remain unchanged, or if more financial incentives will be introduced. For SMEs, this decision is crucial. 

"Higher taxes directly impact cash flow, limiting business owners’ ability to reinvest in operations, hire more staff, or expand into new markets," Theunissen said.

"At a time when small businesses are already grappling with economic uncertainty, access to finance challenges, and rising operational costs, the budget must prioritise tax relief measures and targeted incentives to support SME sustainability and growth."

Cutting red tape

While government has committed to better the processes for business registration, tax compliance, and licensing, past attempts at red tape reduction have delivered little results, leaving SMEs affected by administrative hurdles.

Theunissen said: "The budget must allocate funding towards a fully digital, centralised SME registration and compliance system. Without clear execution timelines, small businesses will continue to struggle with bureaucracy."

Funding for SMEs

The proposed R20 billion annual Transformation Fund for SMEs is step in the right direction, but accessibility remains a concern, according to Theunissen.

Government-backed funding schemes often have challenges such as:

- slow disbursements

- excessive documentation requirements

 - limited reach into informal and township businesses.

Theunissen said: SMEs don’t just need funding - they need a simplified, transparent process. If this budget allocates resources to SME funding, it must also ensure that access is widened, and disbursements are efficient."

Energy security

The ongoing restructuring by Eskom and the liberalisation of private power generation are important long-term reforms, however, a number of SMEs still face rising electricity costs and supply disruptions.

"Large corporations can afford alternative energy solutions, but most SMEs cannot. The budget must introduce targeted subsidies and incentives for small businesses investing in renewable energy," Theunissen said.

Investing in infrastructure

The R900 billion infrastructure investment plan promises upgrades to infrastructure such as roads, rail, water, and housing, which could create significant opportunities for SMEs.

However, in previous years, small businesses have struggled to secure contracts in government-led projects.

Theunissen said: "The budget must include specific provisions for SME participation in infrastructure projects and ensure that procurement processes are accessible to small businesses."

Public Procurement and Market Access

The Public Procurement Act amendments aim to prioritise black-owned, women-owned, and youth-owned businesses in state contracts.

However, challenges such as slow payment cycles and corruption risks continue to undermine SME participation.

"SMEs win contracts but don’t get paid on time. A legally enforced 30-day payment rule for SMEs must be embedded in procurement policies," Theunissen said. 

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