Africa-Press – Tanzania. THE government has been asked to grant a grace period of tax exemptions to business startups to encourage establishment of more business enterprises.
Briefing on a survey aimed at finding the best ways of improving startup business, a researcher with Daima Associates, Professor Samwel Wangwe said waiver on registration fees and introduction of grace period of tax exemptions would make new businesses grow steadily.
“Registration fees payable by new companies, taxes and related costs should be waived as a way of giving relief to new businesses, for them to grow and employ more people thus contributing to economic growth,” he noted.
Prof. Wangwe suggested extension of grace period of tax exemptions, to business startups, of between one to two years for starting businesses, for capital accumulation and allowing smooth take-off and that later, such businesses could create jobs and pay taxes, which are important for economic development.
He said that taxing businesses at the infancy stage was delaying the formalization of most informal businesses while new ones were completely discouraged from taking off.
The researcher, therefore, suggested changes, where regulatory bodies should not hinder new businesses from taking off, but offer education to business after they are in place.
“Regulatory bodies should change from offering service to support business start-ups to grow,” he commended.
He, however, hailed the government, for reducing new companies registration fees and time, which he said had a positive impact on the economy. Currently, the maximum period of registration of a new company has been reduced to between one and two days from six days in the year 2019, according to Mr Andrew Mkapa, the Registration Director from the Business Registration and Licensing Agency (BRELA).
Another improvement, according to Mr Mkapa, is reduction of extra costs, as registration processes are done online and, therefore no need for repetitive paperwork and costs of travelling physically to the agency’s premises.
For his part, Mr Evans Exaud, the Executive Director of Liberty Spark, who commisioned the survey, noted that a big number of businesses aimed at complementing the government’s efforts of eliminating poverty.
Mr Exaud said that individual economic development would support the country economy and promote financial freedom in the country. The World Bank Doing Business report released in 2019, Tanzania was ranked at 141 among 190 surveyed countries.
The country had climbed for three positions from scores of the presiding year.
