The recently tabled draft Licensing of Businesses Bill has attracted more criticism from South African organisations for its inefficiencies, lack of clarity, potential criminalisation of legitimate business and potential extensive negative impact on businesses in the country.

The legislation, which was intended to ease the business licensing process and crack down on illicit business activities, was slammed, as many organisations believed it would achieve the opposite.

The South African Institute of Race Relations (SAIRR), the latest organisation to voice its disapproval, on Monday said the new Bill, which would need an “army of bureaucrats” at municipal level to implement, would negatively impact South Africa’s millions of businesses.

SAIRR head of special research Dr Anthea Jeffery said South Africa had more than 1.3-million businesses registered under the Companies Act, 3.8-million one-person “survivalist” enterprises, 759 000 two-person microbusinesses and another 472 000 entities with two employees.

She pointed out that with over 6.3-million businesses to register, the currently short-staffed and inept municipalities were likely to buckle under the extra responsibilities without the employment of more officials.

Watchdog Corruption Watch last week slammed the Bill, believing it to be open to corruption and abuse, not least by way traffic enforcement officials being used to police compliance, and called for an overhaul.

Similarly, the Free Market Foundation last week expressed its opposition to the Bill and called for its withdrawal, saying it was “draconian, unworkable and susceptible to corruption”, as well as being the opposite of government’s promises of less bureaucratic red tape.

“Small, aspirant entrepreneurs in low-income communities will be hardest hit by these proposed licensing requirements, which will place them at the mercy of officialdom, just as they were during apartheid,” the organisation said in a statement.