TAX HOLIDAY FOR SMES - SANATOR SYLVIA

MBABANE – Senator Sylvia Mthethwa has submitted that a tax holiday of about two years is necessary for small medium enterprises (SMEs).

This she stated during yesterday’s sitting in Senate, when the Trading Licences Order (Amendment) Bill, 2020 was tabled for debate. The Bill was tabled by the Minister of Commerce, Industry and Trade, Manqoba Khumalo and further debated by several senators in the House. The minister, in his first reading of the Bill at Senate, stated that there were requirements that were no longer necessary in order to get a trading licence. He stated that there were conditions that were delaying the process of obtaining the licence such as advertising and hearings.
“EmaSwati will benefit greatly as this Bill will ensure that business people, especially young entrepreneurs are able to start businesses. This will also solve the issue of unemployment as it will make starting a business easier,” he said.

Reduced

Khumalo further submitted that the Bill also reduced the relevance of a health certificate for certain businesses. He stated that there were businesses that did not require health certificates and this Bill would ensure that this was addressed and only the relevant businesses would be obligated to obtain one, such as eateries. “Have you ever considered providing a tax holiday for upcoming SMEs and young entrepreneurs to ensure their businesses succeed? They should be given the opportunity not to pay tax for at least two years,” stated Mthethwa. She further questioned whether there would be a plan which looked at incentivising young people who embarked on a journey of starting a business. “Registering your business for a tender is very expensive and some advertise tenders yet they are already aware of which companies they are going to award the tenders to. There needs to be a way of reducing the cost of registering,” submitted the senator.

She further stated that the Bill should consider expanding the offices of where to register and decried the fact that Mbabane was the sole destination currently. “About 70 per cent of young people are sitting at home. What percentage of the youth sitting at home will be absorbed by the ministry? Where do we leave this country if the culture of business is not cultivated in the youth?” questioned Mthethwa. The minister responded that most of the answers to the questions Mthethwa had posed would be included in the proposed Citizens Economic Empowerment Bill, which has been tabled. “This Bill will seek to address what the country is doing in terms of incentives,” he said. The minister further said they were looking into expanding the offices where entrepreneurs could process their trading licences, instead of it just being Mbabane.

Senator Isaac Magagula in his submission to the debate, said change was good and there was a need for it to be looked at in-depth and analysed. He wondered how the ministry would be able to get rid of the shenanigans of those who were conducting questionable operations in their businesses. “We have to look at the reason and purpose of the initial requirements which have since been removed. Without these requirements, what is there to replace them?” questioned Magagula.

Requirement

This he stated because the proposed Bill would remove the requirement of a hearing when registering for a trading licence, as well as advertising of the licence. However, the health report which is put together with the assistance of the Ministry of Health would not be scrapped off but would no longer be a prerequisite. Magagula further questioned whether the removal of the hearing process would affect the work of Eswatini Commercial Amadoda and questioned where they would be placed and whether the requirements being referred to would only apply to the urban area.

Minister Khumalo when responding to Magagula, stated that they would not tamper with the work of Commercial Amadoda but would instead request them to be a bit faster in their procedure. He further stated that the requirements which were removed were thoroughly assessed before being abolished and in the assessment it was evident that they only benefitted a few and delayed a great percentage. Another senator who debated the Bill was Princess Ntfombiyenkosi, who said the health report prerequisite was vital in order to ensure the products of the businesses adhered to environmental laws and this still needed to be assessed before a company was granted a trading licence. In his submission during the debate, Senator Prince Mshengu stated that what the Bill aimed to achieve was commendable as it would help in ease of doing business and made getting a trading licence much easier for entrepreneurs.
“The youth will hopefully now venture into more businesses once the amendments have been made and the law is enacted,” said the prince.

Hindrance

He stated that the biggest hindrance with the health report was the speed at which it was issued. The prince questioned if this Bill would result in the process of getting a trading licence being faster. Deputy Senate President Ndumiso Mdluli, in his submission during the debate, also questioned whether the process of getting the trading licence would now be shorter. In response, Minister Khumalo stated that they were aiming for a 24-hour turnaround time in the processing of the trading licence. Prince Magudvulela, who was the first senator to debate the Bill, said it was a good initiative to make the process of starting a business in the country much simpler. He, however, questioned whether this would tamper with the regulators’ processes in cases where companies wanted to independently supply electricity. The minister responded to the senator’s question by stating that the amendments were mostly for businesses that were not regulated. “However, we do take in to consideration that at some point we need to look into businesses where regulators are part of the process,” stated Khumalo.

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