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April 30, 2016
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The Codes of Good Practice (CoGP) are now in effect in terms of compiling your Broad Based Black Economic Empowerment (B-BBEE) scorecard. One aspect of the new codes that has caused difficulties is the Enterprise and Supplier Development category. It is one of the priority elements (if you miss your target scorecard, you drop a level), it carries 40 scorecard points out of 105 (there are also 4 additional bonus points) and it involves substantial changes with the previous codes.
What is Enterprise and Supplier Development about?
Enterprise and Supplier Development has two components:
- Supplier development or preferential procurement. There are 25 points on offer where 9 points are awarded for purchasing from more than 51{911e10481a1f19c5a50a3a01e1fba3cf7ef90ea5fc0f63354a64d045bdc3cbbe} black owned businesses and 4 points for buying from businesses which are more than 30{911e10481a1f19c5a50a3a01e1fba3cf7ef90ea5fc0f63354a64d045bdc3cbbe} owned by black women.
- Empowering suppliers with a total of 15 points. This consists of enterprise development or sector programmes to establish, incubate and mentor black owned small to medium sized businesses (5 points). There are 10 points for contributors to supplier development. The target spend for empowerment suppliers is 3{911e10481a1f19c5a50a3a01e1fba3cf7ef90ea5fc0f63354a64d045bdc3cbbe} (2{911e10481a1f19c5a50a3a01e1fba3cf7ef90ea5fc0f63354a64d045bdc3cbbe} for QSE) of profit after tax.
Ask your accountant for help. It is important to use an expert when implementing B-BBEE, the rules are myriad and subject to interpretation.
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