NO NEED TO SUBMIT AUDITED FINANCIALS TO CIC – CONTRACTORS

MBABANE – From imposition of hefty registration fees, to requirement of audited financial statements, Construction Industry Council (CIC) regulations have been strongly criticised for hiking the cost of doing business.

Concerned contractors have grouped themselves to fight tooth and nail to have clauses which could make doing business in the construction industry more cumbersome removed.

The contractors are of the view that the requirement to provide audited financial statements upon registration does not only increase costs of hiring auditors but makes no business sense considering the fact that the duty of CIC is to regulate and not meddle in the affairs of businesses.

The contractors also pointed out that entering the fray to be a contractor in the construction industry, where most business has been reserved for Swazis, would become more difficult if the regulations would be passed as is. 
It has been argued that the advent of the regulations, which are at the last stage of validation and submissions by stakeholders before being presented to Parliament for adoption, it would be quite expensive to be registered with the council yet possession of a CIC certificate would remain an obligation.

It should be mentioned that apart from audited financial statements and steep registration fee, businesses would also be expected to provide evidence of current health and safety management systems prior to registration.
“Audited financial statements (previous three years) for grade one and two, financial statements for grade three to six,” read the regulations. 
Companies will also be expected to produce evidence of current management system to be used by the contractor.
Other requirements include, certified copies of company registration documents, certificate of incorporation, memorandum of association, articles of association, Form J and Form C with share certificate (if company has form J only) and certified copy of current trading licence.

It should also be mentioned that construction costs were also increased by the effective Construction Industry Levy Regulations, 2016.
According to the regulations, project developers pay a levy capped at E20 000 for projects valued between E1  – E2 million, pay levy capped at E40 000 for projects valued between E2 million – E5 million, pay levy capped at E75 000 for projects valued between E5 million-10 million and levy for projects valued at between E10 million-E15 million would be capped at E90 000.

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