Government will give spaza shops money – but they must register with SARS

Business Insider SA
Photo: Lucky Morajane
  • Government's new support scheme for spaza shops will give them funding to buy stock and assure bulk-buying discounts at approved wholesalers.
  • But the spaza shops need to be registered with  the SA Revenue Service, the Unemployment Insurance Fund and the Companies and Intellectual Property Commission.
  • They also need permits from the local municipality. 
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Government has announced a new scheme to fund spaza shops, but the help comes with some lengthy strings attached.

At a media briefing on Tuesday, Khumbudzo Ntshavheni, the minister of small business development, launched a new spaza shop support scheme.

Government will provide spaza shops with seed capital and money to buy stock. Participants will get bulk buying discounts from pre-selected wholesalers as well as access to basic business tools, including speed points. They will also get business support, including book-keeping assistance.

But, in exchange:

  • The spaza shops must register with the SA Revenue Service, the Unemployment Insurance Fund and the Companies and Intellectual Property Commission. Ntshavheni stressed that this does not mean that spaza shops will necessarily start paying tax, but that they needed to be legally registered.
  • The spaza shops must be owner-managed, and must have a bank account.
  • Spaza shops must be willing to buy products produced by South African small businesses as part of the bulk-buying schemes.
  • They must be willing to submit monthly management accounts for at least 12 months.
  • Shops must comply with sanitation requirements, including that their counters are disinfected.
  • They must hold a permit to trade from the local municipality. If they don’t have these permits already, the South African Local Government Association (SALGA) has agreed to help with permits during the lockdown.

Licensed spaza shops are currently allowed to sell essential goods during the lockdown period.

Read | Only licensed spaza shops can stay open during SA's lockdown

There are some 100 000 spaza shops across the country, which are subject to different licensing requirements by individual municipalities.

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