Minister Kumar: Impact of Business Licence Reforms
The business reforms are working.
This was revealed in Parliament yesterday by the Minister for Local Government, Housing and Community Development Premila Kumar during her Ministerial Statement.
Fiji’s reputation as a destination for investors and business people will continue to improve despite the effects of COVID-19 on the economy, she said.
She added that the reform would strengthen Fiji’s status as the hub of the Pacific.
With immense potential in the future, Ms Kumar said she looks forward to the day that local businesses return to prosperity and make our towns and cities vibrant again. The reform came into effect on January 1 this year with the goal of streamlining business licensing in Fiji and to increase Fiji’s standing in the World Bank’s Ease of Doing Business ranking through changes that help encourage new entrepreneurs and formalise existing ones. Amid the economic uncertainty of COVID-19, she said these steps to streamline Fijian business are more crucial than ever.
Previously, Fijian businesses were faced with a number of challenges that have been addressed with the reform.
“Any Fijian who wishes to obtain a business license can now expect a decision within 48 hours of lodging their application,” Ms Kumar said. “Now, under the new system, a business license is issued to lowrisk businesses that can start business and then have six months to ensure full legal compliance.
“This means that individual regulatory authorities will be directly accountable for their service turnaround time, adding efficiency and accountability across both government and the private sector.” Unnecessary paperwork has also been shed with the reduction in documentation.
“We can find promise in the fact that there were such strong indications that our efforts to streamline business in Fiji were already yielding results before this unfortunate turn of events.”
Mrs Kumar said Fijians can take comfort in knowing that more people can realise their dream of owning their own business because of the business licensing reforms. “Wherever possible, I encourage Fijians to take advantage of this enhanced ease of doing business now, finding opportunity in these trying times,” she said.
“The fact that it is now so easy to start a business means that many more people will be able to take that plunge.
“Knowing that the first step is so often the hardest, we have eased that burden as much as possible.”
“Now, the most substantial barrier is psychological – so I ask Fijians directly: Think big, find opportunity in hardship, and consider entrepreneurship.”
Statistics
A total of 15,069 Business Licences were issued from January 1 to March 31 this year compared to 14,121 licences issued over the same period last year.
This is an increase of 948 licences issued, and shows that the new reform has been given a warm reception among Fijian businesses.
■Across all municipalities, a total of 1115 new businesses were registered in the first three months compared to 809 registered last year.
■13,914 business licences renewals were also done, an increase of 609 over those issued in 2019.
■The number of home-based businesses has also increased with the registration of 347 businesses
through the 13 Municipal Councils in the first three months of this year.
■Focus has also been put on reforming Business Licensing Regulations and processes as it discourages individuals to turn a great business idea into a reality.
Changes
Rolling out at the beginning of this year, these changes to business licensing were substantial:
• Business license applicants need to only complete a simple application form and submit two documents: registration of business name and tax registration;
• Business licenses are now issued within 48 hours (or advice will be received if document is missing);
• Businesses can get up to three years’ renewal;
• Start-ups and micro enterprises with up to three employees are exempt from the business licensing fee for their first year of operation;
• Micro enterprises with one to three employees are given a 50per cent discount when renewing their business licenses;
• “Home-based” businesses are now recognised under the Regulation and can operate subject to certain conditions;
• Low-risk businesses are given the green light to start far more quickly, while those businesses classified as high-risk (like food handling, use of chemicals and manufacturing) cannot start operations until they comply with all the relevant regulatory requirements, so as to ensure the health and safety of all Fijians. Efforts are in place to improve coordination among government agencies to facilitate compliance. According to Ms Kumar, the new licensing system is faster, simpler, and allows any type of business of any size to apply for a license to operate in a way that vastly improves the ease and cost of starting a business in Fiji.
“These benefits are being directly felt across Fiji.
“Our reforms to business licensing in Fiji has already proven effective, and given us great promise for the future.
“Fiji has immediately become a much more attractive and welcoming place for aspiring businesspeople.
“For Fijians, these changes mean that there is very little hinderance from having a go at being businesspeople and tapping into their true potential.
“Many small businesses can be launched from home with very low start-up costs, and we can truly feel the excitement about what this will mean for people all over the country.”
On the ground survey
An on-the-ground survey carried out by Municipal Councils has shown that 25 businesses have closed down in Suva, 14 in Nausori, 16 in Labasa, seven in Lautoka and four in Nadi due to the economic impact of COVID-19.
She said the damage assessments show that most of the businesses that have closed are restaurants and liquor shops due to their reliability on disposable income from Fijians and the tourism industry which is in a coma due to the COVID-19 crisis.
“The economic hit delivered by this virus has been severe for both Fiji and the world,” Ms Kumar said.