Statutory regulation cost continues to choke businesses

23 Mar, 2018 - 00:03 0 Views
Statutory regulation cost continues to choke businesses

eBusiness Weekly

Hebert Zharare
The cost of statutory regulation continues to choke businesses, mainly those in the manufacturing sector, as it emerged the National Social Security Authority (NSSA) alone demands about 1 percent of the estimated cost of establishing a business as compliance fees.

Depending on the type of business, other statutory bodies also demand multiple license fees that have seen companies paying up to 13 licences for them to be allowed to operate freely in the country without flouting the law.

Businesses are also infuriated by the fact that some of the licences demanded by Government departments are paid in different offices, resulting in some firms hiring agencies to facilitate licencing, industrial sources revealed to the Business Weekly.
Industrialists say the move is in conflict with Government’s “Zimbabwe is Open for Business” mantra.

Investors want to pay for licences under one roof, and the elimination of levies that are seen as a duplication.

According to a recent survey on “The impact of regulation on cost of doing business” commissioned by the Confederation of Zimbabwe Industries, NSSA, Local Authorities and Environmental Management Agency (EMA) were cited as statutory bodies that literally demand an “arm and leg” from companies.

CZI president Sifelani Jabangwe confirmed the cost of regulation was taking toll on businesses that are already overburdened by other high operating costs such as water, electricity and labour.

“We carried out a study and it revealed how (the) cost of regulation, among other factors, was affecting business.

“You realise these licences are paid in different offices, making life difficult for many businesses. We would appreciate where these licences, mainly from Government departments, are done under one roof,” said Jabangwe.

Hospitality Association of Zimbabwe (HAZ) president Innocent Munyera told Business Weekly that his members are concerned by the cost of doing business.
“The licences are quite many and are applied for at difference offices. The process is done over many days and they expire on different days.
“We are saying, let the licences be done under one roof because there are so many transactions that need to be done.

“There are about 13 statutory requirements that players in the hospitality industry have to comply with,” said Munyera.
CZI in the survey, said some of the regulations are not sector specific; hence players in all sectors would be required to pay depending on their production facilities.

Reads the report: “In addition to costs associated with employee benefits, manufacturing firms also meet costs directly related to their production as compliance costs payable to NSSA. Before a manufacturer starts operating, plans for their factories have to be approved by NSSA before construction starts. For this, the manufacturer will need to pay an amount of 1 percent of the estimated costs as approval fees.”

The report also notes that every manufacturer should be registered in terms of the Factories and Works Act [Chapter 14:08].

Registration needed for factory is $300, elevators ($200), escalators ($100) and $1 800 for boilers.

While factory inspection is free, $1 000 is levied for elevator and escalator inspections and up to $600 for boilers depending on size.

The report noted the firms also have to comply with different regulations from the city councils by paying varying levies. These includes factory a licence, permit to discharge, trading permit, industrial clinic, and an industrial canteen.

“While firms gave different figures regarding how much is paid as license fees, attempts to meet Harare City Council were unsuccessful while attempts to engage the City of Bulawayo on the figures were also not successful,” reads the report.

Although EMA regulations are generally intended to safeguard the environment, firms are supposed to pay fines in addition to fees for general inspection and registration.

There are generally many different types of licences that have to be paid for under EMA, which can result in one firm paying for more than 10 licences.

The licences can be classified into three basic categories; those dealing with effluent and solid waste disposal, those dealing with atmospheric pollution control as well as those dealing with hazardous waste management.

A source from a battery manufacturing company who declined to be named said; “We do not understand why one needs import licence for sulphuric acid, transport licence, storage licence and licence to start using the chemical for battery manufacturing. Surely, one licence covering all this should be enough.”

Recently, Government said it was worried about the multiple licence system for the tourism sector as it is impacting on pricing of products.

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