Enhancing the benefits of formalization under a new status in Benin (Anglais)

Benin, along with sixteen other OHADA countries in Africa, revised their commercial law to introduce a new status called entreprenant. This status is designed for micro and small businesses, and registering with this new status is easy, free of charge...  Voir la suite Benin, along with sixteen other OHADA countries in Africa, revised their commercial law to introduce a new status called entreprenant. This status is designed for micro and small businesses, and registering with this new status is easy, free of charge and takes only one business day. Formalizing means firms gain access to many of the key benefits of formal status, but also makes the firm registered for tax purposes. Existing evidence suggests that easing entry regulations and providing information on the formalization process has had only very limited impacts on the formalization of existing informal firms, especially with regards to tax registration. The authors explanation is that although, in theory, formality has advantages in terms of access to business banking, government training programs, and tax certainty, in practice many firms which formalize fail to receive these benefits. As a result, the costs of formalization exceed the benefits, and so most firms stay informal. This impact note tests different ways to get firms to take-up a new formal status for entrepreneurs in Benin.  Réduire