ABOUT 75% OF SMEs ARE NOT FORMALLY REGISTERED- MINISTRY OF COMMERCE

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• Unregistered businesses state that they feel their businesses are too small to be registered
• Ministry points out that taxation does not play a major role in MSMEs lack and willingness to register

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Photo Credit: www.insidebiz.co.sz

By Ntokozo Nkambule

The Ministry of Commerce Industry and Trade has revealed that about 75% of Micro Small and Medium Enterprises (MSMEs) in the country are not formally registered. This was disclosed by the Director of the MSME Unit in the Ministry of Commerce, Mluleki Dlamini.

Dlamini was speaking during a webinar titled ‘Understanding of Tax Compliance Among MSMEs’ hosted by the Small Enterprises Development Company (SEDCO) in partnership with the Ministry of Commerce Industry and Trade, and the Eswatini Revenue Service (ERS). The data used by the ministry is the Finscope Survey conducted in 2017 by the Finmark Trust.

He said the survey indicated that there are more than 68 536 MSMEs operating in the country, and from those 44 500 businesses are unregistered, which is about 75%. Dlamini did, however, highlight that these figures might have changed and they are working with research partners in updating their statistics.

“We certainly have to improve the number

of formally registered businesses”

The Director noted that most MSMEs aren’t registered because they feel that their businesses are too small for registration. “Majority of the 75% unregistered businesses have indicated that they feel that their businesses are too small to be registered. Only a minority of MSMEs have cited tax issues as a reason for not registering, which means taxation is not a deterrent.

The second biggest factor leading to businesses not being formally registered is the lack of money. Small business owners state that they cannot afford the registration fees” Dlamini said. Other reasons cited for not formally registering were;

• No benefit
• Too complicated
• Tried but was unsuccessful
• Do not have time
• Do not know-how

Despite the gloomy figure, in terms of few businesses being registered in the country, Dlamini said Eswatini is actually doing well compared to other countries in the region. “We certainly have to improve the number of formally registered businesses, but we haven’t done badly in comparison to other countries in the SADC region” he noted.

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