Govt takes steps to reduce red tape

Tuesday, March 5, 2013

Cape Town – Government has taken several steps to reduce the red tape that small businesses face, says Minister of Trade and Industry Rob Davies.

Davies was speaking on Tuesday during the launch of two Small Enterprise Development Agency (Seda) business incubators.

The launch of the Atlantis Renewable Energy Business Incubator and the Khayelitsha Enterprise Development Centre brings the number of incubators to10 that Seda has rolled out in the 2012/13 financial year and lifts the number of incubators the agency has, to 42.

Coming just days after the release of the Small Business Project’s (SBP’s) latest Small and medium enterprises (SME) Growth Index report which found that small business owners last year reported experiencing an increase in red tape, Davies said President Jacob Zuma’s administration had made several moves to reduce red tape for small businesses.

These include:

  • Reducing the number of times a year that small businesses have to submit VAT forms, with the introduction of Turnover Tax in 2009.
  • The new Companies Act had simplified the registration for small companies and had exempted the need for audited financial statements.
  • The department plans to exempt small black owned businesses from having to complete Black Economic Empowerment (BEE) certificates and has proposed in amendments to the BEE codes of good practice so that small black-owned companies that 100% black-owned small firms be automatically recognised as Level-One contributors, while those with 51% of more black-owned firms will automatically be granted a BEE status of Level-Two.
  • A Seda hotline to address late payments, launched in 2009, which has facilitated millions of payments to small businesses.
  • Departments and state agencies that don’t pay small businesses that are not paid within 30 days, upon invoicing, will have to account to the Auditor-General’s office on why they slipped up.
  • Continuous improvements made at the Companies Intellectual Property Commission (CIPC) on business registration, including a project which allowed one to register a company at banks when one opened a bank account.

He said the plan revealed last month by the National Treasury in the Budget Review to set up a single registration process in which companies will be able to register in a once-off manner for all tax and custom activities, formed an important objective of the government.

In this regard, his department, together wiht Home Affairs, the SA Revenue Services (Sars), and the Company and Intellectual Property Commission are interacting towards this and to move to towards a paperless registration process.

Turning to incubation, Davies said 44 applications have been received for the department’s cost-sharing incubation incentive and the department is busy processing these.

One grant has been approved and a further six are close to getting approved, he said.

The Incubation Support Programme, launched by Davies in September last year offers a cost-sharing incentive to organisations that launch or expand incubation programmes.

The incentive will be administered for a period of 10 years up to March 2022 and provides a cost-sharing of up to R10 million per year over three years – with the department to cover 50% costs for large businesses and 40:60 for small micro and medium enterprises.

Davies said his department had spent R10 million in the 2012/13 funding 12 enterprise development centres in the Western Cape, after the closure by the Western Cape government of their Red Door programme.

The department would spend R13 million on funding these centres in 2013/14.

The 10 new incubators that Seda has launched in the last financial year include:

  • The Ekhuruleni Jewellery Incubator
  • The Seda Northern Cape Diamond incubator, in Kimberley
  • Seda Alfred Nzo Agro Manufacturing Incubator in Mount Ayliff, Eastern Cape
  • The Global Jewellery Academy in Lenasia, Gauteng
  • IT incubator Smartxchange in Durban
  • The Seda Limpopo Jewellery Incubator in Polokwane, Limpopo
  • The Seed Container Park, a mixed manufacturing incubator in Diepkloof, Gauteng
  • Lepharo, a copper, zinc and base metals incubator in Springs, Gauteng.
  • Seda Essential Oils Business Incubator in Nkandla, KwaZulu-Natal
  • Garden Route ICT, in George

Seda chief executive Hlonela Lupuwana highlighted several advances made in the last financial year, pointing out that Seda is gaining respect among local government with between 48 and 68 co-locations a year for municipalities, taking place depending on whether these municipalities had funds.

Seda is also working with Eskom and Transnet to develop a supplier development programme and is also co-operating with banking, telecommunications, retail and ICT companies to carry out business development programmes.

Lupuwana said Seda also recently joined the UN Conference on Trade and Development (Unctad) which last year assisted 340 established small and medium-sized businesses through its Empretec programme. –