Key Takeaways:
- The Centre for Development and Enterprise (CDE) has strongly opposed the draft Business Licensing Bill, describing it as the most anti-business legislation since the end of apartheid.
- The bill grants extraordinary powers to authorities to enter business premises and private homes without a warrant, and undermines the autonomy of provinces and municipalities.
- The CDE has called for the ministry to withdraw the bill, arguing that it will harm small and informal firms, and impose new burdens on businesses.
- The bill provides for preferential business licensing for small businesses, but critics argue that this is "BEE in disguise" and will stifle small business growth.
- The National Employers’ Association of South Africa (Neasa) has also opposed the bill, saying that it will discourage entrepreneurship and weaken livelihoods.
Introduction to the Business Licensing Bill
The Centre for Development and Enterprise (CDE) has torn into the draft Business Licensing Bill proposed by the department of small business development, describing it as the most anti-business legislation since the end of apartheid. The bill, which would replace the 1991 Business Act, has been met with strong opposition from the CDE, which has raised several constitutional issues with the proposed legislation in its current form. The CDE has called for the ministry to withdraw the bill, arguing that it will harm small and informal firms, and impose new burdens on businesses.
Constitutional Issues with the Bill
The CDE has raised several constitutional issues with the bill, including the extraordinary powers granted to authorities to enter business premises and private homes without a warrant. The bill also obliges provinces and municipalities to adopt uniform licensing laws and amend their bylaws, which the CDE argues undermines the constitutionally protected autonomy of these spheres of government. The CDE has also argued that the bill expands state power, creates opportunities for corruption, and imposes new burdens on firms at a time when South Africa urgently needs pro-growth reform.
Impact on Small Businesses
The CDE has argued that the bill will have a devastating impact on small and informal firms, which are already struggling to survive in a difficult economic environment. The bill will impose new burdens on these businesses, including the requirement to pay for the privilege of running a business and creating jobs. The CDE has also argued that the bill will stifle small business growth and undermine South Africa’s competitiveness. The National Employers’ Association of South Africa (Neasa) has also opposed the bill, saying that it will discourage entrepreneurship and weaken livelihoods that are already under immense pressure.
Preferential Treatment for Small Businesses
The bill provides for preferential business licensing for small businesses, which could see municipalities lower application fees and reduce municipal rates for small enterprises. However, critics argue that this is "BEE in disguise" and will stifle small business growth. The bill also provides for the appointment of inspectors to enforce business licensing laws, which the CDE has argued is draconian and will discourage entrepreneurship. The CDE has also argued that the provisions are irrational, unconstitutional, and damaging, and that the bill should be withdrawn.
Response from the Department of Small Business Development
The department of small business development has extended the deadline for public comments on the bill to November 28 due to "heightened interest from stakeholders across the country". The bill comes after the publication earlier this year of the country’s first national policy-level guidance on general business licensing, to cut costs and red tape. The aim is to harmonise national, provincial and municipal business licensing to ensure synergy and alignment with regulations and business licensing bylaws. However, the CDE has argued that the bill is conceptually unsound, administratively disastrous, and economically illiterate, and that it should be withdrawn before it destroys confidence and harms small businesses.
Conclusion
In conclusion, the draft Business Licensing Bill has been met with strong opposition from the CDE and other stakeholders, who argue that it will harm small and informal firms, and impose new burdens on businesses. The bill grants extraordinary powers to authorities, undermines the autonomy of provinces and municipalities, and provides for preferential business licensing for small businesses, which critics argue is "BEE in disguise". The CDE has called for the ministry to withdraw the bill, arguing that it is conceptually unsound, administratively disastrous, and economically illiterate. The government should withdraw the bill before it destroys confidence, before municipalities attempt to enforce it, and before already struggling entrepreneurs are told they must pay for the privilege of running a business and creating jobs.
