Day 2, Session 2 14 Nov 2017 Streamlining Administrative Procedures

Transcription

1 Day 2, Session 2 14 Nov 2017 Streamlining Administrative Procedures Judith van Doorn & Linda Deelen

2 Clicker Question In my country, informal micro and small enterprises do not register because: 1. They do not know how to 2. The procedures are long and costly 3. The costs of formalization do not weigh up to the benefits 4. There is a tradition of operating informally 14/11/2017 Academy on Formalisation of Informal Economy 2

3 Clicker Question In my country, informal micro and small enterprises are most concerned about the administrative burden related to : 1. Registration and licensing procedures 2. Tax administration 3. Labour administration 4. Import and export procedures 14/11/2017 Academy on Formalisation of Informal Economy 3

4 Clicker Question In my country, the administrative burden related to operating a business formally 1. Has increased over the past years 2. Has decreased over the past years 3. Has decreased over the past years but entrepreneurs are not aware of it 4. Has stayed the same. 14/11/2017 Academy on Formalisation of Informal Economy 4

5 Streamlining procedures Constraints in terms of time & costs In 2017 it took an enterprise on average: In Sub-Saharan Africa: Approx. 27 days to register, Tackling about 8 administrative procedures In South-East Asia: Approx. 21 days to register, Tackling about 8 procedures; In OECD countries: Approx. 8 days to register, Tackling about 5 procedures; (Source: World Bank Doing Business report) 5

6 Some examples: Streamlining procedures Constraints in terms of time & costs Canada: 2 procedures 1.5 days Cabo Verde: 8 procedures 11 days Zimbabwe: 10 procedures 91 days Singapore: 3 procedures 2.5 days New Zealand: 1 procedure ½ day Cambodia: 9 procedures 99 days (Source: World Bank Doing Business report) 6

7 Streamlining procedures Example - Cameroon Making it easier & cheaper to register 7

8 Streamlining procedures Example Cameroon CFCEs - Centre de Formalités de Création d Entreprises (2005): One stop shops for enterprise creation they aim at simplifying registration / formalisation They combine: the judiciary (Commercial Registry, Court Registry) the fiscal administration (Tax office) social protection (CNPS) As of today: 10 CFCE operating in Cameroon 1 online registration platform 8

9 Streamlining procedures (Cameroon) Before the onestop shop (CFCE) CFCE CFCE After may 2012 Steps Documents to submit Costs 90, ,000 FCFA ,000 FCFA 41,500 FCFA (21,500 RCCM & 20,000 tax office) Time required days 7 35 days 1 5 days Responsible administrations Online System (after may 2016) 9

10 Streamlining procedures Example Cameroon Administrative steps and costs involved Registration at the formalisation one-stop shop (CFCE) 1. Create the file (documents required) 2. Visit the CFCE (forms to complete) 4. 3 rd CFCE visit (confirmation & retrieval of documents) 3. 2 nd CFCE visit (receipt) 10

11 Streamlining procedures Example - Cameroon Administrative steps and costs involved Regular registration process (where there is no CFCE available) 1. Create the file (gather the required documents) 2. Court registry (submit the file) 3. Court registry (collect the certificate) 5. Tax office (collect the taxpayer s card) 4. Tax office (request the taxpayer s card) 11

12 Streamlining procedures What does the R204 say? Members should take into account the diversity of characteristics, circumstances and needs of economic units in the informal economy, and the necessity to address such diversity with tailored approaches. 12

13 Streamlining procedures Example - Benin Special Status for Individual Entrepeneurs 13

14 Benin: Statut de l Entreprenant Status introduced by the Treaty for the Harmonisation of Business Law in Africa (OHADA) in 2010 Main objective: facilitate enterprise formalisation Simplified legal status for small-scale entrepreneurs: Individuals (physical persons) Turnovers below a certain threshold All sectors are eligible The status enables free, simple & quick formalisation (in one day) 14

15 Benin: Statut de l Entreprenant Characteristics: Transitory status (max. 2 years) Exemption from requirement to register at the Commercial Registry Precedes the registration as an individual entrepreneur Rabbit trade Photo by IFDC Photography Advantages: Access to entreprenant bank account Access to support programmes (BDS) Tax exemptions if certain conditions are met (registration at CGA; tax benefit in the 3 rd year) 15

16 Streamlining procedures Example - Brazil 16

17 Simplifying tax and social security for MSEs: SIMPLES Brazil Simples (1996): unification of five different federal taxes plus the employer s contribution to social security into one single payment, dependent on the level of annual sales and the type of economic activity. SIMPLES Nacional (2006): unification of 8 different federal, state and municipal taxes plus employers contribution to social security into one single payment plus exemption from other fiscal obligations. Eligibility SIMPLES National: micro and small enterprises with gross annual income up to BRL 3.6 million ( USD) Workers enjoy the same rights and benefits.

18 SIMPLES Brazil: Results Number of micro and small enterprises registered with Simples Nacional, (thousands) ,3 46, ,5 Total tax revenues under Simples Nacional, (billions of BLR) ,2 26, ,3 5 0 Source: Receita federal

19 Some lessons learnt from the Brazil case It took 20 years to get it right Integrated approach to formalization: SIMPLES and MEI but also improved access to public acquisitions, access to finance, simplification of export procedures, social and solidarity economy etc. Importance of training, information and communication

20 What is the intervention logic for enterprise formalisation? Information & support at the central and local levels Streamlining & rationalisation of procedures Simplified legal status & reduced requirements Enhanced administrative coordination Streamlining of procedures, operating norms Better access to information Simplified & integrated taxes & social contributions Simplified accounting requirements Simplify compliance Simplify registration 21