Business Register Background and Overview Marietha Gouws Executive

Business Register Background and Overview Marietha Gouws Executive Manager: Business Register Seminar on Developing a programme for the implementation of the 2008 SNA and supporting statistics 17 -19 October 2012 Pretoria, South Africa 1

Outline F Background F Objectives of the division F Divisional organogram F Summary of the maintenance process F Internal Stakeholders F Divisional component activities • Business Register Statistics 2

Background F Pre 1999 the organisation had a Business Address Register (BAR) F In 1999 a decision based on international best practise and recommendations from ABS was made to use administrative sources in order to create a new Business Sampling Frame (BSF) F Agreements for administrative data were made with the Department of Trade and Industry (the dti), Department of Labour (Do. L) and South African Revenue Service (SARS) F Current challenges faced: • Resource constrains: led to infrequent updating of information and therefore not reflecting the situation on the ground accurately • Lack of single business number/ unique identifier: extremely difficult to match the various administrative databases 3

Background F By matching the various ‘tax types” of the same business into a cluster we ensure that only businesses that matched are created in the Integrated Business Register (IBR) F The information on the IBR is then used to create an administrative sourced BSF system and a derived statistical sourced BSF that will serve as a sampling frame for economic series F Maintenance rules were designed to meet resource constrains F Rules work for most of the businesses on the BSF F However, businesses with many locations and different activities are the exceptions to the rules Slide 9 4

Objectives of the division F The first objective of the Business Register otherwise referred to as the Business Sampling Frame (BSF) is to serve as a common sampling frame for all survey areas involved in the production of economic statistics. F Secondly the BSF can serve as a source for register-based statistics. 5

Divisional organogram Summary: 3 components 73 staff members 6

Administrative sources Source Information South African Revenue Service (SARS) Income Tax (IT), Value Added Tax (VAT), Payroll taxes: - Pay-as-you-earn (PAYE); - Skills development level (SDL); - Unemployment insurance fund (UIF) Department of Trade and Industry (the dti) Companies and intellectual property Commission (CIPC) - Register of companies Department of Labour Unemployment Insurance Fund (UIF) (Do. L) Registration data; Transaction data 7

Business Register characteristics F Comprehensiveness in coverage, F Sufficiently classified per industry, and F Usability of contact details. In addition, such a register must be regularly maintained so that new units are detected and added, while dead units are removed. The accuracy of a business register, as a foundation of economic statistics, allows results of surveys to mirror economic reality on the ground as much as possible. 8

Classifications Standard Industrial Classification of all Economic Activities (SIC) SIC Description of the SIC 1 Agriculture, Hunting, Forestry and Fishing 2 Mining and Quarrying 3 Manufacturing 4 Electricity, gas and water supply 5 Construction 6 Trade Industries (61 -Wholesale , 62 – Retail, 63 – Motor, 64 - Hotels and restaurants) 7 Transport, Storage and Communication 8 Financial intermediation 9 Community, social and personal services 9

Classifications Classification of institutional sectors Code Description S. 1 Total economy S. 11 Non-financial corporations S. 12 Financial corporations S. 13 General government S. 14 Households S. 15 Non-profit institutions serving households S. 2 Rest of the world 10

Statistical Unit Structure 1. Enterprise (EN) unit - a legal unit or combination of legal units that carry out production activities. 2. Kind-of-Activity (KAU) unit - is an enterprise unit or a part of an enterprise unit involved in one or predominantly one kind of activity on a 5 -digit SIC level. Kind-of-activity unit is dependant on activity for its survival. 3. Geographical (GEO) unit – is an enterprise unit or part of an enterprise unit involved in one or predominantly one kind of activity on a 5 digit SIC level at or from one location. At least one person must be permanently employed at that location. A geographic unit is dependent on activity, location and employment for its survival 11

Enterprise characteristics Size measures - required for stratification during sampling • Enterprise turnover • Number of employees • Hectares of land - agriculture • Salary/wages • Number of rooms - hotels BR quality concerns Classifications – required for sampling • Industry – economic activity • Ownership type • Institutional Current BR maintenance processes 12

Life Cycle status identification Green cross – birthed No cross – activated/reactivated Blue cross – deactivated Red cross – ceased Slide 33 13

Summary of the maintenance process 14

Maintenance sources F Value Added Tax (VAT) Automatic updates Manual updates (VAT investigation list) F Other Profiling Survey area feedback Annual improvement survey Complex business All economic surveys Business Register Slide 9 15

Internal stakeholders Monthly Quarterly Annual/periodic Manufacturing (production & sales) Quarterly Financial Statistics (QFS) Annual Financial statistics (AFS) Various trade sales (wholesale, retail & motor trade) Quarterly Employment Large sample surveys Statistics (QES) Electricity generated Food & beverages Tourism & accommodation Land transport 16

Business Register Operations and Maintenance (Investigate VAT and Survey Area Feedback (SAF) queries) 17

Operations and Maintenance This component is responsible for: F Confirming that VAT investigations are dealt with preferably before quarterly common frames are produced for the survey areas F Ensuring accurate economic data is reported for large businesses F Ensuring queries from survey areas are investigated 18

Business Register Large Business Unit (Profiling of large and complex businesses) 19

Large Business Unit This component is responsible for: F Confirming the Enterprise Group structures as quickly as possible and preferably before quarterly common frames are produced for the survey areas F Ensuring accurate economic data is reported for large businesses and to personally manage Stats SA’s contact with businesses where necessary 20

Profiling overview F Profiling is ongoing and schedules are revised annually to detect major structural changes within the Enterprise Groups (EGs) F The scope of investigations include only South African registered companies F The turnaround time to complete a profile depends on the: • Complexity of the EG • Location of the accounting records (centralised/ decentralised) • Respondents’ co-operation F Current turnaround time to complete a profile is: • 3 to 6 months for less complex EGs • 7 months to 1 year for medium complex EGs • More than a year for very complex EGs 21

Profiling Planning: Priority Setting F Queries from survey areas F Profiles started but not completed in previous year F Enterprise Groups identified by Business Register components F Enterprise Groups not profiled for 2 years or more (Re-Profiles) F New Enterprise Groups identified from business publications 22

Business Register Quality Improvement Unit: QIS (Maintain large business information on the BSF) 23

Quality Improvement Survey (QIS), 2012 Purpose of the survey is to improve the quality of the BSF F The main aim of sample design is to address the known deficiencies • Sample specifications are used to give structure to the design (Sample size = 4 165 live (‘acti’, ‘birt’ & ‘reac’) ENs • 2 000 ENs classified with SIC=09000 – LBU additional scope 24

Business Register Quality Improvement Unit: Development (Development and implementation of guidelines, procedures and training programmes) 25

Development This component is responsible for: F Snapshot- and Frame creation F Design, Development and Collection of the Quality Improvement Survey (QIS) F Updating documents originated from the BR division F Implementing the Units Model F Coordinating BR information sessions to internal stakeholders Slide 28 26

Units Model Structure Operating Entities ITs VAT-Rs VAT-Bs Operating Structure ENs Clusters PAYEs Legal Entities Legal Structure Organisational Data Sampling. U nits Observational Units KAUs Reporting Arrangements UIFs GEOs SDLs Administrative Data Processing Standard Statistical Units Profiling Sampling Survey 27

Statistical Unit Structure F Enterprise (EN) unit - a legal unit or combination of legal units that carry out production activities. F Kind-of-Activity (KAU) unit - is an enterprise unit or a part of an enterprise unit involved in one or predominantly one kind of activity on a 5 -digit SIC level. F Geographical (GEO) unit – is an enterprise unit or part of an enterprise unit involved in one or predominantly one kind of activity on a 5 -digit SIC level at or from one location. 28

Snapshot and Frame creation process Source: May 2012 snapshot 29

Frame creation Common Main Frame (43% of BSF) 1. 499 million ‘Live’ enterprises (life cycle code is birthed, activated or reactivated) 2010 2011 30 30

Industry distribution on the BSF Source: May 2012 snapshot 31

Business Register Quality Improvement Unit: Analysis (Comprehensive analysis on all enterprises on the BSF) 32

Reasons for analysis of the BSF F To monitor the quality of the BSF F To track changes and reasons for changes to the BSF F To ensure that recommendations are implemented correctly 33

Detailed classification status by size group (1) Percentage of industries classified on a 4 - and 5 digit level on the common frame SIC Description of the SIC Size group 1 Size group 2 Size group 3 Size group 4 Turnover value not available 1 Agriculture, Hunting, Forestry and Fishing 90 77 72 77 5 2 Mining and Quarrying 99 95 75 26 7 3 Manufacturing 99 97 91 54 6 4 Electricity, gas and water supply 100 100 29 5 Construction 100 99 98 88 17 6 Trade Industries (61 -Wholesale , 62 – Retail, 63 – Motor, 64 - Hotels and restaurants) 99 99 93 72 8 7 Transport, Storage and Communication 99 96 89 57 9 8 Financial intermediation 98 97 93 66 9 9 Community, social and personal services 99 97 91 66 6 34

Thank you 35