The government must explain how it allowed the Business Licensing Bill to be published for public comment without an impact assessment, says Business Unity South Africa CEO Khulekani Mathe. “Where is the impact assessment that confirms that this bill is in fact taking us in the right direction?” Such an assessment is a requirement before legislation is introduced, he says. “It is not clear that [one] was conducted, and if so, what it revealed.
Did the department [of small business development] ask what the impact of this bill will be on jobs and growth? It doesn’t appear so. It’s not clear to us what the bill is trying to fix.
But what is very clear is that it is going to burden small businesses in the formal and informal sector with onerous regulations impossible to comply with.” The argument of the department of trade, industry & competition that the bill will curb illicit trade is “fallacious”, Mathe says. “You do not need this business licensing bill for this. What you need is the effective implementation and effective enforcement of existing regulations governing what may or may not be sold in South Africa, and how goods come into the country.
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That is what you need.” Far from curbing illicit trade, the bill is likely to increase it. “We know that regulations that are not properly thought through and that criminalise something that people do every day pushes them into the illicit economy. We know from Covid that the stupid regulation of cigarettes pushed cigarettes into the illicit economy.” So the risks posed by this bill should be perfectly clear, he says.
“By putting onerous requirements even on well-meaning people who want to do business legitimately, you’re pushing them into the dark, into the illicit market.” Mathe says the bill flies in the face of President Cyril Ramaphosa’s frequently expressed commitment to cut red tape. “This is a classical example of how unco-ordinated government is. On the one hand you have the president making the issue of red tape a priority and employing somebody in his office to address red tape.
On the other hand, you have this bill. I cannot for the life of me imagine that it comes from the recommendations of [red tape reduction team leader] Sipho Nkosi’s report.” The rhetoric is that this bill is in recognition of the importance of the SME sector. But the NDP here is being used as a lamppost to pee on
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