A new business licensing bill will merely extend and standardise the issuing of licences, which already exists across the country, but is not being implemented uniformly, Department of Trade and Industry director-general Lionel October said on Monday.
Business associations have criticised the Licensing of Businesses Bill, which the department has released for public comment, saying it would increase the amount of red tape for businesses.
The period for lodging public comments ends tomorrow.
However, October said the bill would involve a simple registration process and pointed out that licensing in one form or another already exists in much of the country.
Speaking to SAnews, October said the old Businesses Act of 1991 had devolved the power of licensing businesses to municipalities and provinces.
This, however, had resulted in better resourced municipalities such as the City of Cape Town implementing licensing requirements, while lesser-resourced ones had put no licensing in place.
On top of this, some municipalities, such as those in Johannesburg, cracked down heavily on hawkers, necessitating a more standardised licensing process across the country.
“Regulation already exists. All we are saying is that it must be as simple as possible and low-cost… it must be uniform throughout the country, so that it is easy in, easy out…” October said.
By registering, informal sector traders would also be able to get onto a database which would allow them to gain access to government support programmes.
He said the department was in the process of finalising an informal-sector strategy, and that registration of informal businesses would help the department to target support at such businesses.
The bill would also help the government to crack down on traders selling items such as pirated DVDs.
October said the bill was aimed at anyone that sells services or products to the public, mainly those in the informal sector that had no licence of any kind.
However, he said businesses such as bars, taverns or restaurants that already had the necessary licence needed to operate at present, would be exempt.
He pointed out that this would be done through a provision in the current bill allowed for a category of exemptions, where the minister, the mayor or MEC, could exempt certain categories of businesses.
“You know, we’re more worried about this thing of retail and trading, especially where people are selling illegal goods, goods that get smuggled into the country,” he said.
Licences will also make it more secure to operate a business, he said.
He gave the example of a shebeen operator who doesn’t have a liquor licence and who could therefore easily be closed down or hassled by police or officials.
With a licence, a shebeen operator is able to upgrade and expand their operations.
Foreigners could also be abused if they didn’t have licences, and were at the mercy of suspect police or officials.
“But once you have a registration and licensing system, this guy (foreign shop owner) can say ‘Look here. I am licensed, don’t mess with me’,” he said.
October said his department had engaged with the business sector, which had understood the need for the Bill, but pointed out that the public had a knee-jerk reaction to the word “regulation”, assuming it was socialism.