Doing Business

South Africa’s Reforms on Ease of Doing Business for 2021

doing-business-reforms

South Africa’s ranking on the World Bank’s Ease of Doing Business (EODB) survey declined steadily since 2009, however since it’s prioritization by President Cyril Ramaphosa in 2019, government has made a concerted effort to improve its ranking through the implementation of various reforms across the ten indicators demonstrating a commitment to improving service excellence in the public service.

For the first time since 2009, SA has improved its ranking. Government services have improved EODB aims to streamline government processes by creating efficiencies that would improve cost and turnaround times of government services and improve overall government service delivery.

FOR THE FIRST TIME IN SOUTH AFRICA, SINCE 2009, THE WORLD BANK RECOGNISED SOUTH AFRICA FOR THE IMPLEMENTATION OF FOUR REFORMS.
At the same time, it is a government wide effort to improve South Africa’s ranking to encourage domestic and foreign investment. Invest SA through the Department of Trade, Industry and Competition, (the dtic), leads SA’s EODB programme with oversight from the Presidency since 2019. The results are remarkable, so much that as of 1 April the dtic has committed to implementing reforms across the ten indicators. The results also demonstrates that dynamic collaboration across the different spheres of government has the potential to produce astonishing results and much needed improvement.

1. Starting a business

Bizportal is a flagship project of the EoDB programme and is a pioneering e-government initiative.

For starting a business, government has made it easier to register a company through the online Bizportal platform developed by the Companies and Intellectual Properties Commission (CIPC). It is a platform developed by the Companies and Intellectual Property Commission (CIPC). It offers a digital platform for company registration and related services. Entrepreneurs can reserve a company name, register a new company and register for income tax and withholding taxes (PAYE, UIF and SDL) through the BizPortal platform. Entrepreneurs no longer have to go from Department to Department to register their business, saving them precious time and money.

Previously it took 40 days and 7 procedures with actual physical visits to multiple government departments now it takes 4 procedures and 8 days to register a company. Entrepreneurs need only register on Bizportal, supply the correct information and documentation and a company is registered.

2. Construction Permits

In the area of construction permits, since April 2019, the City of Johannesburg has created a Temporary One-Stop Shop (TOSS) for Site Development Plans (SDPs) and Building Plans. Architects no longer need stamps of approval on their SDP from various departments, as these are now obtained by the TOSS within 15 days for commercial properties. Previously architects had to visit these four departments individually roads and stormwater, energy, water and sanitation, and fire. This has removed 4 procedures and SDP’s for commercial warehouses can now be obtained in 15 days from the City of Johannesburg and not 28 days.

For construction permits there is no need for topographical and Geotech surveys because the municipality has already surveyed the land and these reports are available at no cost.

3. Paying Taxes

In the areas of paying taxes South Africa made paying taxes easier by decreasing audit turnaround times thanks to improved risk rules of the tax authority risk engine. SARS is also working on improving turnaround times for VAT refunds and Corporate Income Tax correction.

  • Time to Comply – VAT refund hours – 30 minutes to one hour. Previously it took 9 hours.
  • VAT refunds are now processed in 4-5 weeks which previously took 15 weeks.
  • Corporate Income Tax Audit process has been reduced from 32 weeks to 17 weeks.

4. Paying Taxes

In the area of Registering a Property, South Africa made registering property more transparent by publishing the list of documents required in conveyancing and less costly by reducing the transfer tax.

For Registering a property the City of Joburg (CoJ) has developed an online system for obtaining rates clearance certificates (for CoJ only). For end users and conveyancers in City of Joburg register online and save time https://eclearances.joburg.org.za/. No need to queue at Thuso House.

5. Trading across borders

For trading across borders specifically for the import and export of vehicles documentary compliance has been reduced.

For trading across borders specifically for the import and export of vehicles documentary compliance has been reduced.

Trading across borders – An additional reform that will benefit Original Equipment Manufacturers (OEM’s) at the Port of Durban is that vehicles for export previously had to be delivered to the port 72 hours before the ship berthing time this has been reduced to 24 hours in advance.

Trading Across Borders -SARS has developed a single structure for joint inspections which involves multiple Departments to improve inspection time.

SARS Preferred Trader Programme for trading across borders

Allows for faster customs clearance. Accreditation is an advanced programme which forms a partnership between SARS and those clients who have an appropriate record of compliance, financial stability, and who maintain a high quality of internal operational processes and computer systems. In return, SARS Customs offers certain benefits to these clients. For more information on benefits and qualifying criteria click here.

There are several other reforms in the pipeline geared toward creating an enabling business environment one of them being the South African Doing Business website. The Doing Business website is easy to use and presents information to entrepreneurs required in the lifecycle of a business. It provides support tools in the form of, practical guidance, forms, templates, available business development support resources and details of applicable legislation and regulations.

The COVID-19 pandemic highlighted the value of public sector business process automation reforms. During the hard lockdown, cities that has progressed further with reforms to automate their construction permitting and registering property systems were able to continue this service and their property development sectors were able to rebound faster than in cities that were reliant on manual processes

Government has adopted a business unusual approach, collaborating across the different levels of government to bring about positive change The Ease of Doing Business programme is committed to improved service delivery to better the lives of South Africans.

Disclaimer-The time, procedures and costs relating to reforms in the article are preliminary estimates are not confirmed by the World Bank Doing Business report for 2021 due to delays in the release of the publication.