South Africa faces the challenge of failure in social service delivery as a result of limited public sector resources in the face of a growing and urgent demand for those resources through unprecedented need. Against this backdrop, social businesses are emerging as agents of change who use innovation and community localisation to generate and deliver new solutions to social and environmental challenges.
The Impact Trust (www.impacttrust.co.za) is doing research on SMEs that perform social services. These businesses have a primary intent to deliver products and/or services with a social or environmental purpose and intended high positive impact. Social businesses can be incorporated as "for profit” or "not for profit” entities. Social businesses tend to adopt hybrid structures, with both non and for profit structures combined in order to access the benefits of both towards achieving their social and environmental objectives. However, it is cumbersome and expensive (in terms of both time and actual administrative costs) to run two legal entities for one purpose and operations.
Based on the extensive research already performed, various proposals have been recorded to assist social businesses from a tax perspective. Each proposal is recorded on the website and you have an opportunity to comment online on each – these comments will be collated and used to justify to the National Treasury the desire for amendments to the SBC and PBO policy currently in operation as well as support the creation of a new social business tax category.
Please click here to provide your comments on these proposals by 15 April 2013.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.