Small Business Development Minister Stella Ndabeni-Abrahams has conceded that there were no effective regulations on spaza shops whether owned by South Africans or foreign nationals in the country.
Ndabeni-Abrahams said her department would introduce legislation in Parliament that will include reserving certain sectors of the economy for South Africans.
“In South Africa as things stand we do not have effective regulation of spaza shops whether owned by South Africans or non-South Africans,” she said.
Ndabeni-Abrahams said the Business Act gave authority to municipalities to issue permits.
“As the department responsible for the sector we are bringing legislation to Parliament to ensure we are able to give ourselves some authority to be able to issue certain directives when it comes to licensing,” she said when she was responding to oral questions in the National Assembly.
She also said the Home Affairs department issued categories of visas to foreign nationals.
“For you to trade the Immigration Act says you must at least invest a minimum of R5 million into the economy to get a business visa. This requires enforcement to check people who are trading are compliant if they are non-South Africans.”
However, Ndabeni-Abrahams said foreign nationals were renting space from property owners that own businesses, not government buildings.
"This requires us to work with communities to say when you lease land or building, make sure the person you lease to has the right to trade.”
Ndabeni-Abrahams revealed that financial services company Lesaka Technologies estimated that the informal sector contributes about R750 billion to the GDP.
“It is estimated that between 62% and 70% are only revenue tax contributors. Spaza shops are the 30% category that is not contributing towards tax. This, therefore, means as the department that does not have a mandate to monitor tax contribution, we are not able to see what is happening,” she said.
“For those businesses we are supporting, we are able to monitor as part of business support to ensure there is compliance to enable them to also get access to markets and finances.”
She said they were working with the Companies and Intellectual Property Commission and Sars to share data but also raise awareness among SMMEs on tax benefits.
“Most of the informal sector does not want to be registered for tax because they are scared their profits will be reduced. That is why the commissioner has set up a special unit that is looking at tax for SMMES that also introduces incentives for those that are tax compliant.”
She was asked whether she believed foreigners should enjoy tax benefits and whether she would lobby the National Treasury to introduce a special tax regime for foreigners who operate any size of business.
Ndabeni-Abrahams said tax regulation was a competency of the National Treasury.
“What I said earlier about the amendment to the Business Act and Business Licensing Act, (was that) there should be certain sectors that are reserved for South Africans within the different segments of our economy.”
“The National Treasury has introduced the Public Procurement Bill, which seeks to make sure it allows for certain sectors that must be reserved for SMMEs, especially those owned by South Africans.”
Ndabeni-Abrahams was hopeful that parliamentarians would support the new legislation she said was aimed at protecting and growing the economy.
Cape Times