Licensing of Businesses Bill re-emerges

Illegal cigarettes targeted

cigarettesAfter being withdrawn by minister of trade and industry, Rob Davies, earlier this year, the Licensing of Businesses Bill has re-emerged as one of the tools deemed necessary for the collection of tax from illicit trading, in this case the thriving illegal cigarette market where billions of rands in duty are being lost annually, either as a result of local manufacture or illegal importation mainly from Zimbabwe.

Originally part of a plan by the department of trade and industry (DTI) to encompass within the tax net a whole range of small and micro businesses in the informal sector, the Licensing of Business Bill was tabled in Parliament designed to register all businesses operating in South Africa.

Its non-selective nature was seen by business, self-evident during parliamentary hearings, as an enormous bureaucratic burden adding yet further red tape to commercial activity and the cost of doing business in South Africa.

As a result of the debate that followed in the portfolio committee on trade and industry, the minister agreed to withdraw the Bill and for DTI to re-think the issue.    It was clearly far too wide ranging, unnecessarily complicated and contained a number of unintended consequences, as pointed out by business and industry.

Licenses for all business

DTI said recently, when drawn into the current issue of illicit tobacco manufacture and importation, that mechanisms were indeed needed to control business in the informal sector and it might still require all businesses to obtain a licence from the local municipality but how such a system would work is still being refined.

A paper on the subject is to be submitted to the ministry by DTI, they say, pressurized now to some extent by the needs of department of police needing tools to control trading in certain commodities, particularly amongst the informal sector and to a certain extent in the micro and small business areas.

Also SARS joins the complainants in the light of the losses in excise duty.   DTI will no doubt be assisted by SARS in trying to widen the tax net accordingly.

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