SMME Classification Criteria: Draft Amendments Gazetted

Posted 15 September 2025 Written by Acts Online
Category Small Business Development

Brought to you by SA Legal Academy: The Department of Small Business Development has released draft amendments to the regulations governing the classification of micro, small, and medium enterprises (SMMEs).

In terms of the National Small Enterprise Act, No. 102 of 1996, the Minister of Small Business Development has gazetted proposed changes to the schedule prescribing the criteria for enterprise classification. This schedule was last substantively amended in March 2019. The draft regulations aim to update the quantitative thresholds used to define micro, small, and medium enterprises across various sectors of the economy.

The classification of an entity as an SMME is a prerequisite for accessing various regulatory benefits, including:

  • Eligibility for small business support programmes and funding administered by the Department;
  • Preferential procurement opportunities under the Preferential Procurement Policy Framework Act, No. 5 of 2000;
  • Specific tax dispensations and simplified accounting standards; and
  • Exemptions or reduced compliance burdens under certain labour and competition regulations.

Stakeholders and interested parties have until 27 October 2025 to submit written representations and comments on the proposed amendments to the Department of Small Business Development.

What this means for you, your business, or your clients

  • For yourself: Review the draft thresholds to determine if your professional practice continues to qualify for SMME-specific tax incentives or simplified reporting requirements under the Companies Act, No. 71 of 2008.
  • For your business: Assess whether the proposed changes to turnover or employee headcount limits will reclassify your firm, potentially impacting your B-BBEE scorecard status or eligibility for small business grants.
  • For your clients: Advise clients in the SMME sector to evaluate their current classification against the new draft criteria to ensure they remain compliant with sector-specific regulations and maintain eligibility for preferential procurement tenders.

Originally published at https://legalacademy.co.za/news/read/smme-classification-criteria-input-sought-on-latest-proposals

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