3% of revenue for Level 3 BEE: a good idea, but first clean up the

A NEW private-sector proposal has reignited debate about how South Africa might simplify transformation.

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The concept is simple: companies pay 3% of gross revenue in exchange for automatic Level 3 B-BBEE status — a neat alternative to the complex scorecard system.

On paper, it sounds practical. The model offers predictability, reduces red tape and could channel significant funding into the Department of Trade, Industry and Competition’s (DTIC) proposed Transformation Fund.

For small and mid-sized businesses, particularly those with turnover under R200 million, it could turn empowerment from an administrative task into a straightforward contribution.

However, this is not government policy. The idea was developed by Alan Knott-Craig Jr. and his NGO, Kululeka. org, and submitted privately to the DTIC. While Minister Parks Tau has said “challenge accepted”, there has been no formal process - no Treasury modelling, SA Revenue Service mechanism, Cabinet memorandum or gazetted discussion paper. For now, it remains advocacy, not state policy.

Even so, it has merit. A revenue-based levy could simplify compliance and create a predictable flow of funds for empowerment.