Charles Ocici
HABARI DAILY I Kampala, Uganda I The high mortality rate of businesses in Kampala is undermining efforts to expand the city’s revenue base, with the Kampala Capital City Authority (KCCA) urging entrepreneurs to improve financial management and comply with tax obligations.
Robert Nowere, KCCA Director for Revenue Collection, said many entrepreneurs who start businesses disappear from the market within a few years, depriving both themselves of livelihoods and the city of a sustainable source of revenue needed to support development.
Nowere said KCCA frequently encounters entrepreneurs when enforcing trading licence requirements, only to find that many of them have closed their businesses when officials return later.
“We usually interface with you. Quite often, the people we interface with when they have just started business today, when we go back two years after, we don’t find them in business,” Nowere made the remarks while representing KCCA Executive Director Sharifah Buzeki during the conclusion of a five-day entrepreneurship programme organised by Enterprise Uganda at their Business Development Center in Butabika, Kampala.
He said the continued disappearance of businesses was worrying not only because of its impact on entrepreneurs and their employees, but also because it makes it difficult for KCCA to expand its revenue base.
Business failures hurt city revenue
According to Nowere, the failure of enterprises to survive means that money invested in businesses can be wiped out within one or two years, creating a cycle in which entrepreneurs repeatedly start and lose businesses.
“But even in the revenue perspective, it is something that is very, very dangerous for revenue expansion-based purposes,” he said.
He said financial discipline, proper bookkeeping and sound business management were therefore critical to ensuring that enterprises survive long enough to contribute to the development of Kampala.
He said KCCA was changing its approach to dealing with businesses, stressing that entrepreneurs should not be viewed merely as people from whom the authority collects taxes and other revenues.
“We are saying that in order for us to make you appreciate the fact that we recognize you as being very critical to us, we have come up with a unit within the revenue directorate which is in charge of revenue public awareness,” Noware said.
Financial discipline
The unit, he said, is intended to go beyond general revenue awareness by helping entrepreneurs improve their financial management practices.
Particular emphasis is being placed on bookkeeping and financial management skills, which Noware said can help businesses understand their financial position and make better decisions.
He also reminded entrepreneurs that obtaining a trading licence is a statutory requirement for operating a business in Kampala.
However, he said compliance should be accompanied by efforts by businesses to remain viable and continue contributing to the city’s economy.
The warning comes as Kampala depends on revenue from businesses and other economic activities to finance public services and urban development.
Nowere said KCCA therefore considers entrepreneurs important partners rather than simply taxpayers.
Turning training into practice
Charles Ocici, the Enterprise Uganda Director General said that the programme seeks to equip aspiring and early-stage entrepreneurs with practical skills in business planning, financial literacy, costing and pricing, record keeping, saving, reinvestment, customer care and marketing.
He urged participants to apply the knowledge acquired instead of allowing the training to become merely another statistic.
He said government programmes aimed at supporting livelihoods and economic empowerment can only achieve their intended objectives when beneficiaries manage their businesses productively.
