Business is extremely important to a country's economy

09Aug 2019
Editor
Dar es Salaam
The Guardian
Business is extremely important to a country's economy

Business is the activity of making one's living or making money by producing or buying and selling products  such as goods and services.

Simply put, it is  any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to big companies .

Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business.

The term is also often used colloquially  but not by lawyers or by public officials  to refer to a company. A company, on the other hand, is a separate legal entity and provides for limited liability, as well as corporate tax rates. A company structure is more complicated and expensive to set up, but offers more protection and benefits for the owner.

The private sector has expressed satisfaction with reforms made by the government recently to enhance ease of doing business in the country as recommended in the Blueprint whose implementation began last year.

Presenting a report on the status of implementation of reforms highlighted in the Blueprint, Prof Lucian Msambichaka said among positive reforms is the role redefining for the Tanzania Bureau of Standards (TBS) and the Tanzania Medicines and Medical Devices Authority (TMDA).

This followed as the government folded up the Tanzania Foods and Drugs Authority (TFDA), a move that has reduced the number of permits, inspection requirements and fees that investors had to apply for.

“The reforms have brought a positive impact to both the private sector and the government. The private sector has been able to significantly reduce compliance costs and in turn increase productivity. On the other hand, the government has observed an increase in compliance and in some instances, revenue,” said Prof Msambichaka.

The veteran UDSM economist was tasked to evaluate the changes as part of Tanzania National Business Council (TNBC) working groups.

Some of the reforms have been highlighted in the Blueprint which proposes to improve the business environment through reduction of regulatory burdens and risks faced by businesses in seeking to comply with regulations.

The TNBC was established under Presidential Circular No. 1 of 2001 and tasked with fostering public and private sector dialogue on issues of economic policy. In November 2018, Chief Secretary John Kijazi launched the TNBC working groups tasked with scientifically informing policy makers on the best way of implementing business enabling environmental reforms through public-private dialogue.

The working groups have resolved to benchmark the status of reform implementation and to communicate what has been done so far by the government to improve the business environment with key stakeholders and the broader public, the don noted.

In his remarks, the minister for Trade and Investment, Innocent Bashungwa reaffirmed the government’s commitment to implementing the Blueprint.

“The government believes in a private sector driven economy as this is essential to achieving middle income economy ambitions,” said Bashungwa.

The government will continue to use stakeholders’ forums to communicate reforms currently being implemented and to highlight which reforms are and would have the highest impact on the private sector, the minister underlined.