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Over 7,557 businesses are doing business illegally in the Southern Nations Nationalities and People’s Regional State according to the the Trade and Industry Development Bureau of the Region.
Businesspeople in Hawassa and Arbaminch are blaming high rent and mal-administration for conducting business without licenses.
The Bureau reported that 7,557 people were found working without a trade license, causing the region to lose out on millions in potential tax revenue. According to the bureau’s 2013/14 report 3,731 people were also trading illegally and or failed to renew their trade license.
Charges were filed against 1,695 enterprises while 2,725 shops received warnings.
Teklu Lemma who owns a butchery in Hawassa said that some people sell meat illegally by lowering the price and then not paying taxes. He says this hurts people who abide by the rules and regulations of the country. “How can I compete with these illegal traders if I pay my taxes properly?” questions Teklu.
Walelegne Bireda who rents a house for his boutique in Hawassa struggles with the rapidly rising rental costs. He says he used to pay 2,000 birr per month but now it has gone up to 4,000 birr per month. “What is worse than me is that some owners rent their houses for businesses as much as 14,000 birr per month. This is very hard for the business community and it forces us to cancel our trade licenses,” he said.
He suggested that the administration try to stop people from raising the rent for unreasonable causes.
Fantahune Yonas, Trade Registration Officer of the Region, told Capital “we did not meet the targeted 1.36 billion birr revenue we expected to generate in the first quarter because some people don’t pay their fair share of tax, due to this we lost 360 million birr.”
He added that they have been working to get people to understand why paying tax is so important and they have been building trade market centers to help entrepreneurs access shops.
There are currently 85,326 trade license holders working in the region.