Johannesburg - A draft law proposing all businesses be licensed with municipalities will negatively impact business in South Africa, the SA Institute of Race Relations (SAIRR) said on Monday.
The institute had made a submission to the trade and industry department that the draft Licensing of Businesses Bill would require “an army of bureaucrats to implement”, it said in a statement.
The bill was approved by Cabinet and published for public comment last month.
“Though exact numbers are hard to obtain, there are more than 1.3 million businesses that are already registered under the Companies Act of 2008,” SAIRR head of special research Anthea Jeffery said.
In addition, there were also around 3.8m one-person enterprises, another 759,000 micro businesses employing one other person, and roughly 472,000 firms with two employees each.
“This suggests that at least 6.3m businesses will have to apply for licences to continue operating.”
She said the department claimed the bill would not create any additional bureaucracy.
“If many more officials are not employed to issue licences, maintain registries, and write reports, the many other tasks already resting on often inept municipalities, (such as) the need to keep accurate financial records for one, are even more likely to remain undone,” Jeffrey said.
“The bill will also add to the costs of the public service. Yet, this has risen so fast in recent years that it is already crowding out essential infrastructure spending,” Jeffery said.
Announcing Cabinet's approval of the bill last month, acting government spokeswoman Phumla Williams told a media briefing it would replace the 1991 Licensing of Businesses Act.
The new bill, once enacted, would provide a simple enabling framework for business licence application procedures by setting norms and standards, she said at the time.
The bill was subsequently published on March 18 by Trade and Industry Minister Rob Davies, allowing 30 days from that date for public comment.
According to the document, the draft legislation also aims to provide a framework for “support monitoring and standard setting by national government in order to build local government into an efficient, frontline agency capable of integrating the activities of all spheres of government for the overall social and economic upliftment of communities... “.
Trade and industry spokesman Sidwell Medupe was quoted last Wednesday as saying the registration fee for businesses “will be about R50”. - Sapa