An Analysis of the Effect of Business Formalization on the Economic Development of Uganda
Loading...
Date
2024-06-10
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Uganda Christian University
Abstract
This study is about business formalization in Uganda. Business formalization occurs after business formulation. Business formulation is the process of starting a new business, while Business Formalization is the process of structuring and organizing a business in a formal manner, involving registration and compliance with the law. This study shows business formalization from the year 2012 till the year 2023, and was carried out through a desk review of all laws governing business Formalization in Uganda, such as the 1995 Constitution of Uganda as amended, Business Names Registration Act cap 109, Companies (General) Regulations S.I No. 7 of 2016 , Company Act 2012, Electronic Transactions Act No. 8 of 2011 , Electronic Signatures Act No. 7 of 2011 , Finance Act 2016, Uganda Registration Services Bureau Act cap 210, Uganda Registration Services Bureau Act cap 210, Stamps Act 2014 cap 342 , Stamps (Amendment) Act 2019, and Tax Procedures Code Act 2014. This study shows that business formalization contributes to the economic development of Uganda hence an advantage, for instance it increases the tax base and tax revenue, formalized businesses have easy access to financial services, enhanced market competitiveness, improved investor confidence, job creation, and regulatory compliance. Formalized businesses have an advantage over the unformalized, hence the disadvantages of none formalization include; limited access to finance, lost tax revenue by the Government of Uganda, limited market competitiveness, informal employment and lack of investor confidence. The study concludes that it is advantageous for all businesses to be formalized in Uganda, over the disadvantages of none formalization of businesses.