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Student's Book Form Five

either Mainland or Zanzibar it is important Improves tax administration: The sharing
to be registered to avoid the consequences of information between BRELA or BPRA
of operating an unregistered. and Tanzania Revenue Authority (TRA) or

Increases access to credit: Many financial Zanzibar Revenue Authority (ZRA) ensures
institutions in the country offer loan that all registered and operating businesses
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access to businesses that have formalised in the country pay taxes. By formalising
their operations. Businesses that have the business, the tax administration burden
undergone the formalisation process can is significantly reduced as fewer resources
use this opportunity to secure funding are allocated to search for those businesses
from financial institutions, government that are informally operating in the country.
or other formal lenders to expand their Increases of tax base: More registered
operations and hence boost economic businesses expand the accessibility of
developments. collecting tax across more entities. Every
Increases market access: A registered registered business at BRELA or BPRA
business increases the level of trust to its or any other authority reflects the same
customers, channel members and general increase in the number of tax payers in the
public. Registration of a business has an TRA or ZRA. If more businesses formalise
implication to a third party that the relevant their operations, the same effect will be
authorities have endorsed the business reflected on the tax base, hence increase
activities and it is safe to transact/interact the revenue collected by tax authorities.
with such business. It is that trust which Assists in the acquisition of property rights:
helps a registered business to penetrate Business formalisation allows the business
various markets. In addition, it enables a in the acquisition of property. By using its
medium-sized business to bid for tenders registered business name, the business may
in the private and public sectors. acquire large investments such as land or

Enables protection of intellectual properties, something which can be limited
property rights: Intellectual property (IP) in the case of unregistered businesses.
registration enables companies to protect Helps in the planning process: Business
their core business as well as research formalisation helps the government and
and development activities. Apart from businesses during the planning process.
protecting businesses, intellectual property With formal businesses, the government
registration also helps companies build can estimate the amount of revenue to be
value. This is because intellectual property collected, the cost of collection, allocation
is typically counted as an asset when of social services, infrastructure, and levies.
assessing a company’s value. As a result, Similarly, business owners can easily
intellectual property assets can even be estimate the amount of tax liable each year
used as collateral for loans. and plan for payment.

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