Partner Contribution – Indevaldi
The small and medium-sized enterprises sector is the lifeblood of successful economies and they should be supported in every manner possible. It is for this reason that amidst a heavy hand from the state, the tax and accounting practice Indevaldi has expanded its service offering to include a regulatory compliance unit. The new unit’s focus is on the entire statutory corpus, inclusive of constitutional principles, legislation, regulations, by-laws, policies, governance frameworks and guidelines, irrespective of jurisdiction, and it helps small to medium-sized businesses to properly understand their statutory environment, to effectively steer around pitfalls and negative consequences, whether financial or reputational and to maintain compliance once achieved. While the new unit is active from plant floor upwards to board level, its immediate focus in current South Africa is supporting clients towards compliance with the Protection of Personal Information Act, with the window period for compliance closing on 30 June 2021.
It is trite that small and medium-sized enterprises (SME’s) serve as the engine room of vibrant economies. Typically, these SME’s stimulate job creation, employment, innovation, and economic growth. The most important outcome of all of these is an improvement in the well-being of the citizens of those countries encouraging and supporting SME’s with clever policy measures and with capable government institutions. A widely used indicator of the extent to which countries succeed in welcoming SME’s is found in the World Bank’s annual Doing Business index. This index compares business regulations of 190 countries and serves as a valuable guide to both policymakers and investors. Interestingly, while increased regulatory activity obviously increases the costs of doing business, since 2003/04 the 20 best-performing economies on this index have carried out a total of 464 regulatory changes, but they have also pushed through 20 significant reforms during this period which helps to explain their top rankings. This suggests that regulatory reform albeit it expensive could encourage and sustain businesses. Not surprisingly, the Doing Business index finds that greater ease of doing business is associated with higher levels of entrepreneurship. Therefore, developing economies should want to strike a balance between control, however, justified, and encouraging entrepreneurs. Indeed, the latest index reports that the cost of starting a business has fallen over time in developing economies, suggesting a moderation of the regulatory environment. Yet, South Africa’s position on this index has weakened from 82 to 84 for 2020. Consider the following rankings of peers: Mauritius 13; Thailand 21; Turkey 33; Rwanda 38; Kenya 56; Chili 58; Zambia 85; Botswana 87; Namibia 104; Egypt 114; Ghana 118; Nigeria 131.
How should the SME sector in South Africa and elsewhere then be supported in navigating a smothering regulatory environment? One answer obviously lies in education and training. Yet another lie in offering a regulatory compliance service focusing on the SME sector like Indevaldi Regulatory Compliance Services does since January 2021. Through pursuing an ethos of integrity, a pathos of understanding and a logos of underlying structure and organization, Indevaldi offers to SME’s everywhere the ability to assess and convey in understandable terms those pieces of legislation and associated regulations relevant for their specific industries, and the capacity to guide them systematically towards optimized compliance and maximum commercial benefit. While South Africa takes the back seat with aspects such as contracting with government, ease of hiring and firing, and the ease of redundancy, it also has now promulgated data protection regulations, known for slowing business necessary though it may be. Leaning on best practices from jurisdictions such as the European Union, South Africa’s Protection of Personal Information legislation is particularly comprehensive, setting stiff penalties for non-compliance. At Indevaldi, therefore, the focus is on assessment to determine compliance gaps for its clients, implementing the specific steps necessary to remedy shortcomings, composing and implementing policy, inducting staff to operate and adapt to the new standard operating procedures, and regularly returning to help maintain a status quo of compliance.