Reply from DTI

Surprise, surprise, surprise! A reply from the DTI to the letter I copied the Minister on regarding CIPRO's Highway Banditry. From no less a personage than a Deputy Director General, too.

Thank you for writing to the Minister with your concerns. The Minister has requested that I indicate to you that this matter has been forwarded to the CIPRO Acting CEO to respond to you. 

As the department, we will however follow up on the issues you raise especially to the extent that you express concern about the requirement for companies that are already suffering to pay further monies in a form of tax and levies. The intention is not to burden businesses, especially small businesses, with unnecessary  additional costs in doing business.

Ordinarily, these are fees for administrative purposes in regard to government services and those of agencies of government. These fees are not intended to cover the total costs of providing the service, but merely a reasonable amount to contribute to administration of various respective functions of government.  

As indicated, to the extent that these fees may be steep for smaller entities, there is a need to look at them very carefully. In this regard, we will consider your concerns as we are currently in the process of determining the fee structure for services rendered in terms of the Companies Act. This will include the fees for annual returns that you are concerned about. We trust that you will also make use of the opportunity to make your comments to the Minister on the draft regulations and fee structure that will be issued in the next few weeks for public comments.

We trust that the Acting CEO of Cipro will assist you with other matters raised in your letter. Should you require further assistance from us the department, please do not hesitate to contact me. 

Now this is all fine and well, and I confess to being pleasantly surprised that somebody in government could actually be bothered to respond. But somewhat misses the point. The primary problem is not the amount of the Protection Money Levy, but the fact that it must be paid at all. And that it is just one more onerous tax on our time and energy. And one more compliance requirement that government failed to properly inform us about but expects us (under Threat of Company Death) to comply with. I wrote back:

Thank you for your speedy and pointed response!

This is not intended to waste your time with a protracted dialog on the matter, but I feel compelled to emphasize one point you raised:

On 15/07/2010 18:50, [you] wrote:

of tax and levies. The intention is not to burden businesses, especially
small businesses, with unnecessary additional costs in doing business.

This is, however, the nett effect. However, it is not merely a question of the direct financial costs:

Ordinarily, these are fees for administrative purposes in regard to
government services and those of agencies of government. These fees are
not intended to cover the total costs of providing the service, but
merely a reasonable amount to contribute to administration of various
respective functions of government.

This cuts to the heart of the matter. The fee levied by CIPRO, together with the requirement for an annual return, achieves nothing and provides absolutely ZERO value over and above what we already have.

(Let them learn how to live within a budget - that provided by the treasury - just like the rest of the country has to. Ordinary people do not have the luxury of being able to go and put a gun to our clients' heads whenever we feel the pinch.)

CIPRO's claim that the annual return is intended to ensure that their records are kept up to date is irrelevant and spurious, since companies and CCs are already legally obliged to inform the Registrar of any changes to those details. So the annual return and associate levy are
a) unnecessary
b) financially burdensome, and
c) too demanding of time and energy.

This last point is particularly relevant for micro-enterprises already struggling to simply keep head above water. Every "couple of hours" I have to spend in regulatory compliances (from whatever quarter of government) is a couple of hours that must be stolen from the attempt to keep body and soul together.

Add to that the ever-increasing requirements to somehow track new regulations and changed compliance requirements in the absence of proper, clear, understandable information and you will understand that it all quickly becomes overwhelming.

So, thanks again for your time and kind consideration, but, as CIPRO has promised to deregister my CC today for non-compliance with their ridiculous requirements, I guess I am now officially out of business. Having gone from creating direct employment for others a few years ago, I am now free to disappear into the cash economy. I guess I should thank you all for my freedom.