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Almost 14,000 businesses return trade licenses in nine months
Increasing house rent, taxes and loss of income are the main reasons for the 13,993 people that have canceled their names from the Addis Ababa Trade and Industry Bureau Register Book and returned licenses in the last nine months of the current fiscal year. The number of those canceling them has risen compared to the previous year when 12,687 canceled.
And additional 3,450 trade licenses have also been suspended temporarily until they find better working conditions.
A claim officer for the Bureau, Meteke Engeda told Capital that 31,964 people obtained business licenses during the last nine months of this current fiscal year. She says people need to conduct thorough feasibility studies and business plans when they start to set up a business. “Just because one person succeeds in selling mobile phones doesn’t mean the other person will be successful without a proper business plan’’ she stressed.
The Bureau says there are currently 217,000 business people actively working in Addis Ababa. This fiscal year it expects to hand out 49,000 trade licenses.
According to a World Bank report, Ethiopia was ranked 125th out of 189 countries for ease of doing business.
Another issue is the expense of cash register machines. Yonas Girmay a new business person said “my friend and I began an electric installation business but after only operating for three months we were told to purchase a cash register machine and we couldn’t afford it, we asked for more time but that request was not approved so we had to close our shop.”.
There was a six month tax holiday for new businesses but that is no longer the case which is another factor that makes starting a new business a challenging task.
The Doing Business report measures the number of procedures, time and cost for a small and medium-size limited liability company to start up and formally operate. To make the data comparable across 189 economies, Doing Business uses a standardized business that is 100 percent domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people within the first month of operations.