4 LinkedIn reasons government budgets should matter to SMEs
Yes, they can be pretty hum-drum. Yes, they are generally too lengthy to listen to for any amount of time. And yes, they do appear at first glance, to focus more on the socio-economic development of the macro or wider society than on the “small-man”.
However, as a business owner or manager, paying closer attention to what is presented in a government’s annual budget should be a matter of great priority. Even if you are unable to listen on the actual day and time it is delivered, you should still make it your business (no pun intended), to later get a hard or soft copy of same, to see and determine how any proposed changes are likely to affect the operations of your business.
Not sure exactly what to look for? Well, here are four (4) priority areas to closely note:
1. Tax changes: Depending on whether the present budget can be described as a surplus (i.e. more revenue is available than what was budgeted for), deficit (less revenue is available than what was budgeted for), or, a balanced budget (the revenue and what is budgeted for are relatively the same), there may be corresponding implications for taxes (lower, higher, or even no changes) placed on business owners, particularly Small and Micro Enterprises (SMEs).
2. Incentives: Where a government seeks to bolster the local economy through further growth of SMEs, you can expect to see several incentives in budget presentation. Included among the customary motivations to sustain SMEs are: easier access to loans from government-owned facilities, a higher loan-borrowing ceiling and, a greater deferred payment date from government-owned facilities, as well as further tax deductions for new businesses in certain niche markets e.g. agriculture, creatives, food and beverage, et cetera.
3. Reduced bureaucracy: This is an area that many of us have likely had to encounter, whether we registered our businesses as sole entrepreneurs, NGOs, partnerships, or limited liability companies. The long lines, endless sea of documents and frustratingly-long processing periods can sometimes dissuade the most patient of persons from pursuing their first business venture, or even continuing. During the budget, listen out for ways that the government will propose to modernize business, for example, through digital transformation of documents from hard to soft copy, a wider array of online services, as well as greater in-person service efficiency.
4. Trade and investment opportunities: Not because we live on islands means we shouldn’t think global! Remaining sustainable and competitive in the 21st century implies strategically marketing the products, services and talents of our local SMEs beyond our shores. It further translates into sourcing individuals and entities (local and foreign) to tangibly invest their time expertise and money to boost the local economy, in what should ideally be a win-win situation for them, the government and SMEs.
Budgets are a vital source of information for SMEs. As an SME stakeholder, it pays to always stay informed.
Keywords: LinkedIn Local Caribbean, taxes, incentives, bureaucracy, trade