GENERAL STATEMENT

The BCCI’s position on the Trade Licensing Bill 2022 can be divided into two broad categories: the short-to-medium term, and the long-term positions.    

SHORT-TO-MEDIUM TERM

In the short-term, the BCCI’s position is one of compromise with the local government’s need to preserve a certain level of revenue, while simultaneously addressing flaws in the administration of the current system. This latter component is governed by five guiding principles: predictability, transparency, accountability, administrative ease, and, revenue-neutrality.

Despite the BCCI’s longstanding position for a flat-fee-based structure that is more aligned with international best practices (IBPs), the private sector has acknowledged the existing cities’ and towns’ reliance on this recurrent-revenue source. Therefore, the Trade Licensing Bill 2022 is reviewed, firstly, on how well it achieves the five guiding principles, especially when treating with the nine municipalities that are already beneficiaries of the regime.

Expansion to Villages:

It must be noted, therefore, that the expansion to the rural areas was not envisioned as being consistent with the revenue-neutrality principle. The long-term goal would be to completely phase-out the property-tax-by-design trade licensing “fee”, and replace it with an actual fee-based system. Therefore, the expansion of the existing regime to the villages is inconsistent and incongruent with the principles under which the BCCI has engaged with the Ministry of Local Government over the last decade. Most importantly, it is out of step with IBPs.

Furthermore, even if the regime is introduced to the rural areas, the BCCI maintains that it is ill-advised to “export” any feature of the current Trade Licensing system—which stakeholders already accept has deviated significantly from best practice—to the village councils. The stakeholders need to explore more efficient means of generating council revenues without disincentivizing economic activity.

Schedule VII:

Also included in the short-term considerations is Schedule VII. If any fee or fees are deemed necessary, the position is that such fees should be no more than necessary to cover administrative costs for issuing the licensing. Again, consistent with international best practice, a fee system should not be exclusively for revenue-generating purposes.

MEDIUM-TO-LONG TERM

For the medium-to-long term, the BCCI strongly maintains its position that the entire trade licensing regime to conform to international best practices, which, inter alia, speaks to the instituting of a flat-fee structure (if any fee at all). Frankly, there is little justification—beyond the pure revenue-centric objectives—for a trade licensing regime, save, of course, for public-safety considerations. However, even the public-safety and health objectives can be addressed by other forms of regulation, including proper zoning laws.