18/08/2017
The Amended Codes of Good Practice issued under section 9 of the B-BBEE Act (Act No 53 of 2003, as amended) came into effect on 1 May 2015. Under the amended B-BBEE codes, accounting officers and verification professionals are no longer permitted to issue B-BBEE certificates to Exempt Micro Enterprises (EMEs) and black controlled and owned Qualifying Small Enterprises (QSEs). An EME is an entity with an annual turnover of R10 million or less while a QSE is an entity with a turnover of R 10 million or more but less than R50 million. The amended codes merely require the affected EME or QSE to, on an annual basis, obtain a sworn affidavit confirming their annual total revenue and level of black ownership. According to the B-BBEE Commission, 'The purpose of this intervention is to reduce the cost of compliance and the cost of doing business for small businesses in South Africa.'
All EMEs automatically qualify as Level 4 contributors, 100% owned EMEs qualify as Level 1 contributors while EMEs that are at least 51% black owned qualify as Level 2 contributors. QSEs with 100% black ownership qualify as Level 1 contributors while QSEs with at least 51% black ownership qualify as Level 2 contributors.
Organs of state have also been advised to desist from undermining the intent and spirit of the legislation and to align their procurement processes to minimize confusion, bureaucracy and unnecessary costs for small businesses. The B-BBEE Commission further reiterated that any accounting officer or verification professional who continues to issue certificates to EMEs and QSEs contrary to the B-BBEE Act will be pursued to the extent of having their accreditation withdrawn or cancelled.
