Minister of Trade, Industry, and Competition, Parks Tau, says South African businesses must pay 3% of their annual net profit after tax to the proposed R100 billion Transformation Fund.
He was answering a parliamentary question.
Another funding source will come through the Competition Commission’s public interest participation.
“Entities will be required to contribute to the transformation fund for compliance with the enterprise and supplier development element.”
He explained that the BBBEE codes of good practice provide for multinational entities to, inter alia, channel 25% of the value of their South African operations for transformation purpose.
The fund will be administered through a public/private partnership.
The fund’s governance structure will consist of a board and oversight committees.
The Minister explained that Section 9(2) of the Constitution places a collective burden on all to advocate for equality and redress.
He said the constitutional undertaking is given legislative impetus through Section 2(h) of the B-BBEE Act.
This obliges the government to “increase the effective economic participation of black-owned and managed enterprises”.
He added that it includes small, medium and micro enterprises and co-operatives and enhances their access to financial and non-financial support.
“The Transformation Fund is established to address access to funding for black-owned enterprises and SMMEs,” Tau said.
“This will increase their economic participation and income-earning potential in line with the Constitution.”
[Image: Steve Buissinne from Pixabay]