The Tanzania Private Sector Foundation (TPSF) together with the Tanzania National Business Council (TNBC), and VIBINDO have commissioned a study and consultant to ascertain the best way to issue IDs to informal businesses as a step towards their formalization.
Following deliberations at the 10th TNBC the Government declared its intent to issue ID cards to informal businesses after a call from the Private Sector. It is the belief of the majority of the Private Sector that there are more merits in formalizing a business than carrying on business informally. With regards to this the Government later affirmed its commitment through the Finance Act 2017/2018, directing the Local Government Finance Act that, Local Government through LGAs recognize informal businesses by issuing ID cards.
However challenges in it’s implementation are already being felt, with hesitations and resistance from informal businesses, eyeing the move as a means of the government to squeeze into their profit margins by collecting more taxes. It’s the worry of the Private Sector that uncoordinated initiatives could result into diverting the initial intention and instead ending up increasing the cost of doing business, making the sector more informal.
The uniqueness of the study in comparison to previous studies, is that it is expected to come out with a proper framework and set guidelines to ensure proper implementation towards recognizing informal businesses. Once submitted the framework and guideline is expected to get stakeholder buy-in from the Private Sector, and later hold consultative meetings with the Public Sector and Dar es Salaam Regional Commissioner towards piloting. Dar es Salaam is Tanzania’s biggest commercial city hence the rational for the Pilot to be conducted there.
Once all stakeholders are aligned with the same consensus NIDA is expected to prepare the IDs, of which it has been suggested that the IDs will remain simple and not require bio-metric entry of the business owner.