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SHOP LICENCES AMENDMENT BILLS DIGEST
NAME: SHOP LICENCES AMENDMENT BILL, 2016
HB NUMBER: H.B.10, 2016
MINISTRY: LOCAL GOVERNMENT, RURAL AND URBAN DEVELOPMENT
DATE: MARCH 2017
The Shop Licences Amendment Bill seeks to amend the Shop Licences Act Chapter 14:17 of 1976, which was last reviewed in 1980. The Shop Licences Act provides for the control and licensing of certain trades and businesses carried out in shops, stores and other fixed places of business and by means of vending machines. The Bill will amend certain sections of the Act, which have had negative implications on the ‘Ease of Doing Business’ in Zimbabwe. The Zimbabwe 2015 Doing Business Report highlighted that the city municipal licence procedures contributed to the bulk of Zimbabwe’s regulatory burden in setting up a business. Therefore, the amendment of the Shop Licences Act is quite relevant and urgent in order to create a conducive environment for Zimbabwe to attract investors.
The amendment of the Shop Licences Act is in line with government’s efforts to improve the
“Ease of Doing Business” in Zimbabwe. The Government launched the Ease of Doing Business Program to undertake reforms set to address challenges faced by entrepreneurs seeking to open and operate a small to medium-size business, while complying with relevant regulations. With regard to the Shop Licencing Act, a number of concerns were raised by the various stakeholders, hence the need to amend the Act to be in line with best practices internationally. Economies around the world have taken steps making it easier to start a business—streamlining procedures by setting up a one-stop shop, making procedures simpler or faster by introducing technology and reducing or eliminating minimum capital requirements. Thus, according to the 2015 Doing Business Report, Zimbabwe has undertaken business registration reforms in stages and the amendment of the Shop Licences Act is one of the Reforms. One of the main aim of the proposed reforms are to streamline the shop licencing procedures and ensure that the process is less cumbersome.
Currently, it would take about 90 days for a firm to be registered, with municipal regulations consuming about 55 days, which is about 60% of the days. Therefore, the amendments are aimed at improving the investment climate and encourage the informal sector to formalise their operations. It is expected that once the ease of doing business reforms have been implemented, benefits such as greater firm satisfaction, more registered businesses, financial resources and job opportunities would accrue for Zimbabweans to benefit.
3.0 REVIEW AND ANALYSIS OF CLAUSES 3.1 Clause 3: Control of Vending Machines
This section provides for the licencing of vending machines. The current Act provides for the issuance of a licence in respect of the vending machine to be operated wholly or partly on the licenced premises, thereby meaning that the operator would have to apply for multiple vending machine licences for different locations. Thus, clause 3 of the bill seeks to allow the licencing authority to issue one vending machine licence to a person operating more than one vending machine on any premises, thereby making the application process less cumbersome.
3.2 Clause 4: Exemptions
Clause 4 of the Bill repeals section 6 of the principal Act, which allowed the Minister to use his discretion to give exemptions on particular issues when applying for or renewing a shop licence.
3.3 Clause 5: Payment of Fees to Inspect the Record of Proceedings
The Act provides for a fee to be charged to the public to inspect the record of proceedings of a licencing authority. However, Clause 5 of the Bill revokes the requirement for persons to pay a fee to inspect the record of proceedings, thereby enhancing transparency of the licensing procedures and reducing the costs of application.
3.4 Clause 6: Duration of Licence Validity
The Act provides for all shop licences to be valid up to 31 December of the year for which it has been issued or renewed. The Bill proposes that the licences be valid for a period as determined by the licencing authority for a period of not less than twelve months but not more than five years. This proposal is welcome as it will allow the shop owners to apply for shop licences of their choice within the specified limits as opposed to the status quo where licences are being awarded for not more than 12 months, making the whole process costly.
3.5 Clause 7: Inclusion of Licencing Fees in the Budgets
The Bill propose that all the licencing authorities should incorporate the licencing fees in their annual budgets which shall be approved by the Minister. This new provision will ensure transparency and accountability given that the licence fees will constitute part of the revenue of the licencing authority.
3.6 Clause 8: Publication of Application
The principal Act provides for the publication of application by investors in the newspapers twice over a period of 55 days when applying for a shop licence and lodging of objections before a licence is issued. However, this provision has since been waived by the Minister of Local Government and Public Works and therefore, the Bill propose to repeal this whole section. However, it is important to note that the provision was necessary to ensure that interested parties are well informed about the applications that have been made and would enable such persons to raise their concerns.
3.7 Clause 9: Mode of Application
The Bill proposes for the introduction of electronic medium within five years from the date of commencement of the Act, through which persons may lodge electronic applications for a licence. This is aimed at improving the business environment and ensuring that the shop licence application processing is in line with the current global trend. Clause 9 would introduce three new subsections under Section 16 to promote the use of electronic mediums in the application process such as allowing applicants to download and submit forms electronically thereby serving their time and money.
3.8 Clause 10: Period of Determination for a New Licence
The Act provides for determination of an application for a new licence within forty-five (45) days from the day the notice of application is given. Thus the Bill repeals Section 20 (5)(a) and replace with new subsection which requires the licencing authority to determine an application within twenty-one (21) days from the day the notice of application is given and to respond to the applicant, giving the reasons for the refusal of the application.
3.9 Clause 12: Cancellation of Permit
The principal Act provides for cancellation of a permit issued to any person by a licencing authority without giving any reasons for cancellation. However, Clause 12 of the Bill proposes that the licencing authority gives reasons for permit cancellation to the permit holder. This will ensure transparency as the permit holders will be exposed to the reasons behind the cancellation of their permits which is not the case right now with the current Act, whereby a licencing authority will simply cancel the permit without any explanation.
3.10 Clause 13: Review of Powers of Authorised Officers
The principal Act allows the authorised officers to search the premises, place, vehicle or structure of a licence holder if there are reasonable grounds to suspect abuse of the shop licence by the holder. Clause 13 of the Bill, however, seeks to amend the powers of the authorised officers and strip off the power to ‘search’ the premises, place, vehicle or structure of the licence holder.
3.11 Clause 14: Composition of Administrative Court
This clause repeals Section 40 of the principal Act, which provides for the detailed composition of the Administrative Court. This creates room for the Administrative Court to be flexible in the sourcing for persons to assess a dispute case.
3.12 Clause 16: Penalties
This clause provides for a schedule which will amend various sections of the principal Act by deleting the requirement for imprisonment in cases where a person fails to pay a fine as determined by a court.
4.1 The Bill seeks to reduce the application period for a new shop licence and improve the ‘ease of doing businesses in Zimbabwe. For example, when the Bill becomes law, entrepreneurs will no longer need to physically collect the Shop Licence application from the licencing authorities but to use the electronic platform to download the forms free of charge.
4.2 The Bill is in line with the provisions of the Constitution as it seeks to promote national development as provided for under clause 13 (1b & c), where it states that the State and all institution of government must put in place measures to foster development of agricultural sector, industrial and commercial enterprises in order to empower Zimbabwean citizens.
4.3 The amendment of the Act is in line with international standards as it seeks to modernise and improve the application process for shop licences by business entrepreneurs and investors.
4.4 The Bill seeks to promote the use of ICT, since it mandates all local authorities to establish or approve the establishment of electronic mediums within five years from the date of commencement of the Amendment Act.
4.5 The Bill will enhance transparency and accountability in the shop licence application process by local authorities and thereby in turn boost their revenue base.
The Bill is a noble idea as it seeks to address the current challenges faced by investors when applying for a shop licence in Zimbabwe. It is important to note that once the Bill is passed, the Act will go a long way in creating a conducive environment for ‘ease of doing business’ in Zimbabwe and in turn help boost local authorities revenues.
REFERENCES Shop Licences Act, Chapter 14:17
Shop Licences Amendment Bill, H.B.10, 2016