BEE Exempt Certificates – New B-BBEE Codes
Broad-based Black Economic Empowerment is a South African government initiative to address the shortcomings of the Narrow-based Empowerment initiative of 2003-2004. Under the Amended B-BBEE Codes of 2013, the Exempted Micro Enterprise or EME only has to submit a sworn affidavit annually to confirm their BEE status. BEE Exempt Certificates as issued before are thus replaced through this system. However, you can still obtain BEE Exempt Certificates and then submit your annual sworn affidavit to confirm your status of EME.
Note that under the New B-BBEE Codes, the QSE must also submit a sworn affidavit annually if it is at least 51% black owned. To qualify as an EME under the New Codes, which were gazetted in October 2013, enterprises with an annual turnover of less than R10 million qualify as Exempted Micro Enterprises. Note that the exemption doesn’t apply to the enterprises operating within certain the sectors, such as Tourism, Construction and Transport, as well as Forestry, CA, ICT, Financial Services, Property or Agriculture, until the updating of the relevant Sector Codes.
EMEs with less than 51% black ownership qualify as Level 4 BEE contributors and those with 51% and more black ownership automatically qualify for Level 2 BEE status. The 100% black owned EMEs qualify as Level 1 BEE contributors.
EMEs have the options of getting rated on the QSE scorecard if they want to get a better BEE status. We, however, recommend refraining from such, if the scoring means lowering of the current BEE status, as such will seriously affect your ability to compete favourably against EMEs with better ratings.
EMEs are effectively exempt from official BEE measurement of the New BBEE Codes. This ensures that smaller businesses can compete favourably with large generic and QSE enterprises for government tenders and public contracts.
Black Economic Empowerment should be seen as an initiative to help broaden the economic shareholding in the country and to enhance the training profile. With wider wealth distribution, the economic buying power is also enhanced, which in turn helps to develop the country.
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