1 / 7

Informality In Liberia: Current Status and Progress to date

Informality In Liberia: Current Status and Progress to date . Edwina D. Vakun -Lincoln Director of Micro, Small and Medium Enterprises Ministry of Commerce and Industry Liberia. The LIBERIA PRIVATE SECTOR.

parker
Download Presentation

Informality In Liberia: Current Status and Progress to date

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Informality In Liberia: Current Status and Progress to date Edwina D. Vakun-Lincoln Director of Micro, Small and Medium Enterprises Ministry of Commerce and Industry Liberia Informality in Liberia: Causes and Work in Progress

  2. The LIBERIA PRIVATE SECTOR • Prior to the Liberian civil crisis, the private sector was a major contributor to the overall economic growth of the country. • More than 85% of Liberians find their livelihood in the private sector (LISGIS). • Although there is no official data to document the national situation, information emanating from the field revealed that the informal sector constitutes about 50% of the private sector. • Women are particularly affected by informality. Almost all women-owned businesses are small, and the vast majority is informal. Informality in Liberia: Causes and Work in Progress

  3. Informality in Liberia • Most informal businesses have an average annual turnover of less than US$ 5,000 • They do not conform to any labor practices, do not pay any form of taxes to government, they lack structure and location. • Principle areas of high informality among businesses are: • Auto repairs • Carpenters and wood workers • Agriculture • Retailing of general merchandise • Real Estate and construction workers • Handicrafts and Artisans • Fisheries Informality in Liberia: Causes and Work in Progress

  4. Causes of Informality in Liberia • Culture and attitude of businesses towards business formalization • SMEs see this as a means of tax evasion • Avoidance of labor practices • Lack of easy access to: • registration centers (bad roads, limited registration centers - 3 ), and • registration information • Lack of incentives from central government • Tax Returns • Tax Break/Holiday • Some factors leading to high informality of women businesses are - Lack of incentives/motivations - Single-Parenthood - Lack of awareness Informality in Liberia: Causes and Work in Progress

  5. Costsof Informality in Liberia Government • Lost tax revenue limits the scope of the state to provide services, and increases dependence on aid. • If a high proportion of business activity operates outside the scope of regulation and policy interventions, governments are unable to shape macro-economic outcomes through policy. Informality in Liberia: Causes and Work in Progress

  6. Costs to Informality in Liberia Informal Businesses Informality comes at a cost… • Vulnerable to tax agent and municipal authorities. • Lack public trust • Lack access to business support services • Access to Training and Finance • Protection from government • Informal businesses have a limited access to legal rights, finances and other services. • Absence of predictable, enforceable rules, which increase risks, and corruption • Red tape • Bribing authority to avoid formalization and tax payment • The act to stay ‘under the radar’ thus restricts the potential for firms to grow Informality in Liberia: Causes and Work in Progress

  7. Work in Progress: • New Liberia Business Registry ( reduced registration from 99 days to at most 5 days) • Commercial Court– to fast track commercial disputes • Implementation of the MSME Policy (Legal and Regulatory Framework) • National Standard Lab • Cancellation of the Business License Fees of L$4,200.00 • Stimulus package in terms of Loan to businesses by the Government. Informality in Liberia: Causes and Work in Progress

More Related