Cape Town – The Minister of Trade and Industry Rob Davies said his department had considered concerns raised by businesses on the Licensing of Businesses Bill and that when the bill is presented again in Parliament it would be “significantly different”.
The bill was put out for public comment in March, and the comments period came to an end last month.
But Davies – who stressed today at a media briefing in Parliament that there was no provision in the bill to target foreigners – said his department would not backtrack to scrap the bill, arguing that the country had a significant illicit economy operating in townships which was a threat to small businesses.
“This is the economy of illegal imports, this is the trade in sub-standard products, this is the economy of people who don’t pay their VAT… and they then compete unfairly with people who do observe these requirements – that is the economy that is there,” he said.
Davies said business associations have continually called for his department to shut down such operators and that the bill would help to tackle this problem, as raids often proved fruitless as such operators often resurfaced some where else.
“It never was our intention to have an onerous registration process, which requires business people themselves to do a lot of things,” he said.
The idea is to have municipalities in the course of registering people for all kinds of services, to then forward these names to a national database.
The department also wanted a database containing those found to be involved illegal activities, transgressors would be then excluded from operating in South Africans.
He said in South Africa five in seven small businesses failed in the first year of starting up pointing out that the ratio internationally is more in the region of a 50% failure rate.
Business regulations were not behind much of the country’s high business failure rate, he believed.
He said the country’s high business failure rate was more as a result of black entrepreneurs having been actively undermined and business ownership by black people outlawed during apartheid.
The state, he believed, mustn’t only remove red tape but also ensure that it offers active support – through for example incentives and incubation – to small businesses.
He said there was a tendency to see any kind of regulation as red tape – adding that there is a distinction between red tape and regulation.
Red tape is bureaucratic and unnecessary, while the other was necessary to regulate
The department was moving to reduce red tape, he said – through the new Companies Act which made it easier for small companies to do business by removing some accounting and audit requirements.
Added to this when the BEE Bill is passed into law large companies can no longer compel their black small suppliers to get BEE verification as this would be replaced by having such suppliers sign an affidavit to attest to their BEE status. – SAnews.gov.za
