1. 1 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

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

3. 3 Background  Pre 1999 the organisation had a Business Address Register (BAR)  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)  Agreements for administrative data were made with the Department of Trade and Industry (the dti), Department of Labour (DoL) and South African Revenue Service (SARS)  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

4. 4 Background  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)  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  Maintenance rules were designed to meet resource constrains Maintenance rules  Rules work for most of the businesses on the BSF  However, businesses with many locations and different activities are the exceptions to the rules Slide 9

5. 5 Objectives of the division  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.  Secondly the BSF can serve as a source for register-based statistics.

6. 6 Divisional organogram Summary: 3 components 73 staff members

7. 7 Administrative sources SourceInformation 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 (DoL) Unemployment Insurance Fund (UIF) Registration data; Transaction dataTransaction

8. 8 Business Register characteristics  Comprehensiveness in coverage,  Sufficiently classified per industry, and  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.

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

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

11. 11 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 - i s 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

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

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

14. 14 Summary of the maintenance process

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

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

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

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

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

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

21. 21 Profiling overview  Profiling is ongoing and schedules are revised annually to detect major structural changes within the Enterprise Groups (EGs)  The scope of investigations include only South African registered companies  The turnaround time to complete a profile depends on the: Complexity of the EG Location of the accounting records (centralised/ decentralised) Respondents’ co-operation  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

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

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

24. 24 Quality Improvement Survey (QIS), 2012 Purpose of the survey is to improve the quality of the BSF  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

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

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

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

28. 28 Statistical Unit Structure  Enterprise (EN) unit - a legal unit or combination of legal units that carry out production activities.  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.  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.

29. 29 Snapshot and Frame creation process Source: May 2012 snapshot

30. 30 Frame creation Common Main Frame (43% of BSF) 1.499 million ‘Live’ enterprises (life cycle code is birthed, activated or reactivated) 20102011

31. 31 Industry distribution on the BSF Source: May 2012 snapshot

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

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

34. 34 Detailed classification status by size group (1) SICDescription of the SIC Percentage of industries classified on a 4- and 5- digit level on the common frame Size group 1 Size group 2 Size group 3 Size group 4 Turnover value not available 1Agriculture, Hunting, Forestry and Fishing907772775 2Mining and Quarrying999575267 3Manufacturing999791546 4Electricity, gas and water supply100 29 5Construction10099988817 6Trade Industries (61-Wholesale,62 – Retail, 63 – Motor, 64 - Hotels and restaurants) 99 93728 7Transport, Storage and Communication999689579 8Financial intermediation989793669 9Community, social and personal services999791666

35. 35 Thank you