South Africa's SMEs Protest New Fees

by Robert Lee, for LawAndTax-News.com, London

15 July 2005

A newly reinstated requirement to submit annual returns and fees to the Companies and Intellectual Property Registration Office (CIPRO) has South Africa's small and medium-sized enterprises up in arms, according to reports in the national media this week.

The requirement to submit documents detailing companies' directors, registered address, auditors and other information to the Office was dropped by the South African authorities in 1986, but has been reinstated "for purposes of data integrity and information reliability", according to CIPRO.

In addition to the increased administrative burden being placed on the country's businesses, industry groups have argued that the R450 fee and the need for online submission of the return may present a sticking point for many small businesses.

In a letter to Mandisi Mpahlwa, the South African Trade and Industry Minister, the Cape Town Regional Chamber of Commerce and Industry explained that:

"The payment of the prescribed fees is viewed by business as nothing short of a tax. R450 might not seem a large amount for some companies, but there are hundreds of small and dormant companies and close corporations for whom R450 a year is a considerable amount."

Suggesting that the fees are likely to cost the business sector in the region of R619 million per year, the letter continued:

"Why would government, via Cipro, need to drain 600m a year out of the economy to keep a record system up to date? Surely basic statistical information for record-keeping purposes can be obtained via the South African Revenue Service with the approval of the finance minister."

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