Call to Reduce Regulatory Barriers for Businesses in Africa

Muhtasari

• Instead of relying primarily on higher taxes, African governments should formalise more businesses, reduce regulatory barriers, and promote private-sector growth as a more sustainable path to prosperity.
• Limits of higher taxes Increasing taxes may generate additional revenue in the short term, but it creates structural barriers that limit economic growth.
• Removing regulatory barriers Governments can generate more sustainable public revenue by making it easier for businesses to start, grow, and operate.
• When regulatory barriers are reduced, more businesses expand, create jobs, and pay taxes, broadening the tax base without increasing tax rates.
• Small businesses and young entrepreneurs are often affected the most because higher taxes reduce already limited profit margins and increase operating costs.