The truth about B-BBEE and how it affects your business

Broad-Based Black Empowerment (B-BBEE) is a term in the business world abhorred and detested by those it targets. Recent changes to the B-BBEE Codes have led to many misinterpretations and gave way to rumours and myths about what it is and how it is implemented.

There are many misconceptions about B-BBEE in the marketplace and how it affects your business.

Let’s do some myth-busting:

The road to sustainable B-BBEE
I need to give away or sell ownership of my Business to Black People:

 

The answer is NO!�

90% of businesses do not need to have Black Ownership to be B-BBEE Compliant.

I do not do business with the State, so I do not need a B-BBEE Certificate:

 

Wrong!�

By LAW all companies need to have a B-BBEE Certificate or Affidavit if they fall below the various thresholds.

There is nothing the government can do if my business does not have a B-BBEE Scorecard:

 

Wrong!�

The law states that, if the DTI enters any business, and they do not have a B-BBEE Scorecard or Affidavit to EXEMPT them, the DTI may fine the company up to 10% of TURNOVER as well as IMPRISONMENT to the owners or directors of the company for up to two years.

My Company turnover is below the Threshold:

 

With the New Codes that came into effect in May 2015, the Thresholds have changed. Companies with an annual turnover of less than R10-million is exempt (General Codes).�

Unfortunately, it is not true for all companies.�

Companies in the following Sectors have thresholds that start from R 1. 5 million to R 5 million Turnover per year and need a Compliant B-BBEE Scorecard:�

  • Construction Sector
  • Tourism Sector (including Restaurants)
  • Transport Sector
  • Forestry Sector
  • Agri Sector
  • ICT Sector (Telecommunication)
  • Financial Sector
  • Chartered Accountancy
  • Property Sector
B-BBEE will be discontinued and fall away:

 

WRONG!�

B-BBEE will not fall away!�

The government is fully committed to transformation and said that Companies need to Comply!�

It is only going to get more abstruse and demanding.

The company that does our B-BBEE Audit will help us when we need to do our B-BBEE Audit:

 

WRONG!�

The law states that no verification company � companies that issue B-BBEE Certificates � may give B-BBEE advice to enhance their client’s B-BBEE Score. They may only Verify!�

�

It is the same as when you go to SARS � they may not by law give you TAX advice, that is why you need to consult a Tax Consultant!

B-BBEE LEVELS AND THRESHOLDS
LEVEL OLD CODES AMENDED CODES B-BBEE recognition level

1

 100 points 100 points

135%

2

 85 � 99.9 points 95 – 99.9 points

125%

3

 75 – 84.9 points 90 – 94.9 points

110%

4

 65 � 74.9 points 80 – 89.9 points

100%

5

 55 � 64.9 points 75 – 79.9 points

80%

6

 45 � 54.9 points 70 – 74.9 points

60%

7

 40 � 44.9 points 55 � 69.9 points

50%

8

 30 � 39.9 points 40 � 54.9 points

10%
Non-Compliant 0 � 29.9 points 0 � 39.9 points

0%
� � � �
Please note that the above mentioned Levels and Thresholds are applicable to all the Codes and Sector Charter Codes.