JCC strategizes to formalize informal business actors

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Dawit Muilgeta (Photo: Anteneh Aklilu)

Jobs Creation Commission (JCC) announces that its new strategy gives attention for informal business actors.

The strategy that is expected to be done for the implementation by the end of this budget year has different components that target to improve job creation in urban and rural areas.

Under the new strategy JCC has given attention for those who have significant contribution to the economy but have not yet been identified by the government.

Dawit Mulugeta, Manager of Innovative Jobs and Projects at JCC, told Capital that the informal business sector is taking up to 30 percent of the country’s economy, but those who engage in this sector are neither formally registered nor pay tax.

“Since they have enabled to sustain themselves and their family and generate revenue as JCC we recognize them because that they are also contributing to the economy,” he said.

Due to that, under the latest strategy revision that will replace the ten years old ‘Micro and Small Business Strategy’ the informal sector has got big attention to find ways to include them on a formal system.

“It will of great benefit to them on tax net and they will be able to get different type of support from the government which they have so far missed due to the miss link between the two. Therefore, they will get the required support that is facilitated by the government and the relevant stakeholders,” he added.

“Awareness creation will be a priority to inform them on the benefit that they may get if they become formal business operators. Mostly those who are engaged on informal sector do not have required information, knowhow and required trainings, meanwhile some of them are awarded but preferred the informal way to hide tax,” he explained.

Making the informal sector competitive in the business environment is the second phase of the strategy. The level of competitiveness is to be set by making them tailor made business actors under the improvement of doing business.

Under the new scheme identifying those who purposely avoid the tax scheme and demand to exist in the informal sector would be also undertaken in different policy measures with required government offices.

Those who are involved on ‘gig economy’ like working on delivery services has also grabbed the attention of JCC.

It has formed a taskforce to look after the activity of the gig economy actors to operate on formal ways. “There is a significant number of citizens engaged on more than two revenue making jobs, but because they are not benefited properly due to that there is no formal platform that recognized them and connected them with customers on affordable rate,” Dawit explained.

In this regard a platform that has a market linkage scheme and others shall be developed and currently JCC is working on it.

“To solve the problem and come up with solutions, policy and infrastructure like digital literacy and internet facility have to be developed,” he said. In this aspect we are now working with the support of UNDP and other partners and government offices, and service providers that will brew fruit in the coming couple of years.