Kampala- The Ugandan and other African governments have been challenged to create tax policies which promote the growth of small businesses.
The founder and chief executive officer Mara Group, Mr Ashish Thakkar, who was the keynote speaker at the Monitor Thought Leaders Forum on Friday, said this is the next thing he is working on through his role in the Global Youth Council at the World Economic Forum.
“If governments can create a tax policy that can promote small businesses by coming up with a certain threshold, it will help to make the informal sector formal,” he said.
Mr Thakkar said if put in place, the policy will also help the informal businesses which are mostly dominated by the youth and women to graduate to the formal sector, which means more revenue will be realised.
Uganda has one of the highest rates of start-up businesses globally but majority of them close shop before they celebrate their first anniversary.
On the same subject of taxing, participants asked Uganda Revenue Authority to exempt start-up businesses so that they use the first profits to grow the businesses.
However, Uganda Revenue Authority (URA), Commissioner General, Ms Allen Kagina who was among the panel of experts, said taxes are at the bottom of the list of what is killing businesses in Uganda as per the research she did.
“There are a number of constraints that cause start-ups to collapse; credit is the first on the list, access to markets, and the biggest challenge is information on market access and products,” Ms Kagina said.
She said URA has to collect taxes for services which again are needed to do business.
“The issue of tax is a chicken and egg story because you need the services for you to do the business and money must come from taxes,’ she added.
As an entrepreneur, Mr Thakkar, who among others shared his experience of dropping out of school to do business at 15 years, said start-up businesses also need mentorship to succeed.
“If you try to do things in a right manner and think differently, you can actually make a huge impact,” he said.
“Africa’s time is now. With majority of the fastest growing economies resident in sub- Saharan Africa. As a continent, we are larger than North America, Europe, India and China. We have natural resources in abundance...we couldn’t have chosen a better time to be in a better place.”
Ashish Thakkar on Thinking Big
1. I hate to break your heart but it’s going to be tough and challenging - you are going to fall so many times but you have to get up and get back on your feet because there is no other way.
2. In my experience, I have learnt that one has got to think big and start small.
3. Be practical, think long-term because there are no short-cuts and there is no overnight success.