Broad-based black economic empowerment (B-BBEE) is a central part of the South African Government’s transformation strategy. B-BBEE is a crucial consideration for any company operating in South Africa, and is even relevant to private sector businesses that don’t sell goods or services to the government. These private sector businesses might have customers who have to meet their own B-BBEE procurement targets, and as a result, are likely to consider the B-BBEE rating of their suppliers (this will be a factor in determining the entities with whom to do business).
Let’s take a look at the different benefits of partnering with a B-BBEE Level 1 insurance broker such as RBS.
Reduced tax liabilities
Partnering with a B-BBEE compliant company may result in reduced tax liabilities. This is because B-BBEE Level 1 companies qualify for tax incentives, including:
- Reduced corporate tax rates.
- Accelerated depreciation on certain assets.
- Tax deductions for donations.
Increased procurement recognition
If your business procures services from a B-BBEE compliant supplier, your business earns extra B-BBEE points on your scorecard. More points translates to a higher B-BBEE status. A higher B-BBEE status gives your business tax rebates and reduced tax liabilities.
Enhanced skills development
B-BBEE Level 1 insurance brokers have to invest in skills development initiatives. These skills development initiatives can be for their staff and the broader community. Your business can partner with a B-BBEE Level 1 insurance broker on one of these initiatives. Your business can claim tax deductions for supporting these initiatives.
Tax deductions for donations
B-BBEE Level 1 insurance brokers are often involved in charitable initiatives and projects. Your business can claim tax deductions for donations made towards these initiatives.
What is B-BBEE?
Broad-Based Black Economic Empowerment (B-BBEE) is a policy created by the South African government. The Broad-Based Black Economic Empowerment Act 53 of 2003 was created to help redress the inequalities of South Africa’s past by promoting and advancing the economic participation of black people in the country.
The Act aims to achieve this by encouraging companies and organisations to take steps to empower black people economically. The ultimate goal of the Act is to create a more equitable and inclusive economy, where all South Africans have a fair chance to participate and benefit from the country’s economic growth and development.
B-BBEE uses an easy to understand scorecard system. The scorecard system measures a company’s level of compliance with a range of deliverables and initiatives. These initiatives span various categories, including:
- Ownership.
- Management.
- Skills development.
- Enterprise.
- Supplier development.
- Socio-economic development.
A company is awarded a score based on the extent to which they comply with the various requirements. A company’s score determines their B-BBEE status. The highest level of compliance is Level 1, while the lowest is Level 8.
RBS is a B-BBEE Level 1 insurance broker
RBS is proud to be a B-BBEE Level 1 leading black-owned national insurance brokerage. Our focus is developing skills and staff in South Africa to support the transformation of the financial services industry while offering our clients a strong B-BBEE level 1 accredited partner.
“We have been on a journey searching for the right partner through a rigorous process. We are pleased to have not only found a really active and value-adding partner in Letsema, but one who’s values and drive are closely aligned to RBS. We have co-created a broker consolidation strategy that fully supports our vision to become one of the country’s largest and most successful black owned and level 1 B-BBEE certified brokers in South Africa, with transformation as one of our core principals,” said Michael Petersen, RBS Founder and CEO.
Is your company looking to partner with a B-BBEE Level 1 insurance broker? Partner with RBS today.
More reading:
Risk Benefits Solutions achieves level one BBBEE accreditation