City investigates 70,000 business licenses

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Around 70,000 business licenses are being investigated throughout Addis Ababa by the City’s Trade Bureau. The month long investigation has focused on service providers, manufacturing companies, drug stores, restaurants, retail shops, importers and exporters. In two weeks a report will be filed with the results of the investigation. Ten Investigators looked at documents, competency, certificates and the type of business.
“Some companies introduce seductive offers, promising high earnings and get rich quick schemes. These claims are backed by forged documents and license certificates. People using these methods will have their licenses revoked. Government workers behind allowing illegal business will also be punished,” Kasshaun Beyene, who directs trade relations, said.
In many cases, these companies are fictitious entities, Kasshaun said, carrying out financial fraud, and reaching clients through telephone calls, text messages, e-mails, and social media.
“Our main goal is not to stop businesses, it is to let them operate legally. We have over 230,000 businesses operating in the city. We are looking at this sample size to determine the amount of fraud and to see if we need to add more investigators and open more cases. Businesses must have a trade license from the bureau to be legitimate.”
The 686/2014 proclamation requires businesses to re-register every year, within the first four months of the fiscal year, which begins on July 7. Failure to do so will lead to the expiration 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.