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TRA, ZRB educate SMEs on business
2007-07-20 10:03:47
By Correspondent Ernest Ambali
The giant Coca-Cola Company which produces the world’s popular consumer soft drink, ``Coca-Cola`` grew from a cottage industry through thick and thin since 1886, in Atlanta, United States of America.
To grow from cottage level, the company did not wave a magic wand and pronounce the accompanying magic word ``abracadabra``.
``One thing we have done...we listened first to the consumers` blind taste tests, and then we listened to consumers when they wrote letters.
``Save for the introduction of such spin-offs as sprite, the company had relied on natural growth and aggressive marketing to build its soft drink business...,`` said the then Coca-Cola company Chairman, Roberto Goizueta some years ago.
Tanzania - mainland and Zanzibar - has a huge number of cottatage industries known as Small and Medium Enterprises (SMEs).
They have remained at that level for many years. They cannot grow for many reasons, including lack of technical know-how and finance-substantial capital.
However, since a few years ago, commercial banks like the CRDB Bank, Tanzania Investment Bank (TIB), have been providing finances to encourage growth of SMEs left in the cold since independence. They were left to take care of themselves.
But they still lacked two of the most important factors, these are: ``how to run business more efficiently ``to realise substantial profits increasingly to give them finances for growth of their enterprises so that they are enabled to pay taxes. They also lacked aggressiveness in selling their goods.
The Tanzania Revenue authority (TRA) and the Zanzibar Revenue Board (ZRB) then jointly compiled a booklet containing the basic principles of running business so that `owners of the SMEs could realise profits increasingly for growth.
The booklet entitled ``The Ethics of doing business,`` distributed to SMEs through the TRA and ZRB says in its introduction that the government had realised need for educating owners of SMEs on the best ways and means of doing their businesses.
The TRA and ZRB say that the booklet has been compiled during this period when the Fourth Phase government has exerted more power on collection of revenue increasingly to finance social services to improve lives of every Tanzanian.
Business education for SMEs as delivered by the TRA and ZRB is also in tandem with provisions of the National Economic Empowerment Policy drawn up and passed by Parliament in 2004.
On raising skills and knowledge levels, the Policy, observes that low level of skills, education and lack of resources, limit the effective participation of many Tanzanians in economic activities.
The government therefore drew up several strategies to raise skills and knowledge of Tanzanians in general, and SMEs.
The strategies include establishing an institution that overseas all empowerment initiatives for enhancing entrepreneurial capacity.
Although the TRA and ZRB do not belong to that institution, yet as government revenue bodies, they felt obliged to participate in this important programme of educating SMEs in running their businesses.
However, participation of the TRA and ZRB in the education for SMEs or informal sector comes after the Vice President, Ali Mohamed Shein had, last October, called upon the TRA to bring this group into the formal so that they pay tax thus widening the tax base.
Vice President Shein made the call when he addressed the TRA staff and invited guests from neighbouring countries and overseas at the celebrations of the TRA`s 10th Anniversary in Dar es Salaam.
``The informal sector must fully contribute tax….`` Vice President Shein said. But for this sector to fully pay tax, it must grow and make substantial profits.
To achieve this, the SMEs need two important inputs. These are capital and education to give them skills for running their businesses.
One might argue that to expect these small business entities to grow to the level of the Coca-Cola world’s giant company, is to demand too much.
Owners of the SMEs should borrow a leaf from Reginald Mengi’s book and other Tanzania`s progressive businesses like the Azam Group of companies.
These people raised their cottage industries to national level then crossed the country`s boundary to invest in neighbouring countries. For example we hear of Azam products in the Democratic Republic of Congo.
Mr. Mengi who owns the IPP group of companies and is the group`s Chairman, is repeatedly heard saying ``Success in business comes to people who dare``.
Indeed, this is what Bill Gates, the world’s richest person is also repeatedly saying, emphasizing, among other things, that to succeed in business, one needs ``creativity, innovativeness, courage to move forward``.
One of India’s great leaders, Nehru, once ended his speech saying; ``Success often comes to those who dare and act. It seldom goes to the timid, who are ever afraid of consequences.
``We play for high stake; and if we seek to achieve great things, it can only be through great dangers``, Nehru said.
One Tanzanian progressive businessman once told me that ``many people prefer nakedness to clothing themselves, because they believe their God brought them to this world naked. Had God wanted them to be clothed they would have been born clothed``.
What this businessman meant is that some people believe their rich neighbours are wealthy because God had determined their destiny.
It is, indeed, not easy to make people believe that the meriful, good God, does not determine people to poverty.
Late President Mwalimu Julius Kambarage Nyerere in his 16th October, 1968 speech to the Mary knoll sisters Conference in New York said it succinctly.
``For the present condition of men must be unacceptable to all who think of an individual person as a unique creation of a living God.
``We say man was created in the image of God, I refuse to imagine a God who is poor, ignorant, superstitious, fearful, oppressed, and wretched - which is the lot of the majority of those He created in his own image.
``Men are creators of themselves and their conditions, but under present conditions we are creatures, not of God, but of our fellow men``. Mwalimu`s topic was ``The Church and Society``.
It is therefore possible for the SMEs to rise from their present ground level to high echelons - to become giant companies like the IPP and Azam group of companies.
What the SMEs need is the technical know-how of running their businesses. So the role played by the TRA and ZRB is commendable.
Also given the necessary capital boost as given by some of the commercial banks in the country, like the NMB, TIB, CRDB Bank, the toddlers enterprises will rise to join the companies which are paying substantial taxes.
Their rise to the formal level will give the treasury more revenue to enable the country to move towards financial self-reliance.
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