The draft broad-based black economic empowerment (B-BBEE) codes for the tourism industry are causing concern within the sector.
One of the major impacts is the change in qualifying revenue thresholds for exempted micro-enterprises, qualifying small enterprises and large enterprises, compared with the generic codes.
“The majority of businesses in the industry will drop at least two levels – this is especially evident with companies that achieve more than R10 million (€637,300) in turnover and who do not have black ownership,” says Robin Matthews, MD of Invasset Compliance and Fedhasa Cape member.
Since 2009, average B-BBEE levels have improved from level five to level three, however, should the draft codes be implemented, the progress over the last five years is at risk of being reversed, says Matthews.
The new draft tourism codes are more challenging than the current codes and, therefore, companies will have to ensure they adopt the correct strategy. “Be prepared to obtain expert advice to ensure you are educated in terms of the new codes,” says Matthews. “It will have an extra cost on your business, but if done correctly, this can be a cost saving in the long run.”