Two month extension for business license renewals

The Addis Ababa Trade Bureau (AATB) will extend the renewal period for business licenses by two months.

The new period which will be expected to be implemented on this fiscal year will start on June 7 and ends on the same date at January.

Yoesph Tadesse, Trade Regulation expert in AATB said, ‘’We have observed long lines around the time of the dead line to renew business licenses and that creates a burden for our workers  and creates a delay for business owners so we hope this will alleviate the problem.’’

He added that annual fine for late renewal, which is currently set at 20,000 birr will be lowered  to 10,000 birr after the new renewal period comes into effect.

The 686/2014 proclamation requires businesses to reregister every year, within the first four months of the fiscal year, which begins on July 7. Failure to do so would lead to the expiry of the registration certificate.

However, businesses can renew their licenses all year long, albeit with penalties and the suspension of the license, after the first four months. The first two months after the deadline, businesses do not pay fines for renewals, although their licenses are suspended until they reregister. In the third month, there is fine of 2,500 Birr and 1,500 Birr for each subsequent month, until the end of the fiscal year. After this licenses are canceled.

Business license renewal, on the other hand, requires tax clearance and quality certification from the appropriate Authority. Moreover, licenses cannot be renewed without a valid business registration certificate.

The 2015 World Bank report of doing business in Ethiopia ranks the country three places below its rank in 2014. Ethiopia ranked 132 from 189 countries in terms of ease and difficulty of doing business. The report ranked Ethiopia taking into account 11 indicators, including starting a business. In terms of this indicator, Ethiopia ranked 168 out of 189 countries, coming behind competitive economies like South Africa, Egypt, Rwanda, Kenya and Uganda.