ATE:Time to address high cost of doing business

The Association of Tanzania Employers (ATE) have told the new government to address policy and law issues that have been triggering the high cost of doing business in country. 

Calling for open dialogue to address the concerns and seek consensus 

ATE Executive Director, Dr. Aggrey K. Mlimuka, was categorical that the high cost of doing business in Tanzania can go down if  Labour laws (among other laws and policies) are  reviewed to take in concerns of employers and in essence increase employment across the country.

ATE want unfriendly business provisions in Labour laws like  contracts of employments, hours of work, termination procedures, compensation of unfair termination, stringent rules and regulations on the employment of non-Tanzanians, among other issues  to be looked at a new.

Dr Mlimuka is of the opinion that the policies, laws and regulation should  create a situation that balances the rights and interests of all parties involved in a practical way.

“Labour laws while reasonably regulating employment should not disadvantage employers and prevent business growth,” he said. 

He said the government should work with ATE to measure the impact of

labour laws, other regulations and the business environment to ensure employers growth is not impeded and to identify remedies.

Labour Laws have a big  impact on business environment, and ATE would continue to carry out research, engage in dialogue and develop best practices for employers.

Private Sector Organisations have often complained that  business environment is still constrained by legislation and regulations on trade, commerce, employment and micro and small enterprises. Yet the private sector employ a large proportion of the population  and its growth  is important for generation of  employment and the wholesome well being of the economy.

According to Dr Mlimuka, employers want a number of laws to be reviewed, to augur well with business needs. The following are some of the laws, ATE seeks dialogue with the government and the national assembly, for amendments that will be win-win, for the state and the private sector.

1. Workers Compensation Fund – employers are required to contribute one per cent of their payrolls yet some  employers have reliable medical insurance packages in place. Such employers feel the Fund is  an additional cost.

1. The law on employment of non-citizens is another burning issue employers would love to see light at the end of the tunnel. 

1. The Labour laws should have a clear guideline on time and period new working mothers may take off from the workplace to breast feed. The law is clear on the duration and frequency of maternity leaves it is extremely vague on the breast feeding factor.

1. Employers would love to see more relaxed Labour and Migration laws on foreigners working in the country vis a vis the lack of qualified Tanzanian workers in specialized and non-specialized fields. According to Dr Mlimuka what counts is a committed workforce in general that contributes towards the development of the nation as Tanzanians tackle its education system and balances the supply and demands of the labour market in line with employers’ specific driven expectations.

1. ATE also wants NSSF Act to be amended – According to ATE employers  face challenge calculating the contribution from the employee’s salary to the social security funds particularly The National Social Security Fund (NSSF). “An employer is obliged to deduct either 5% or 10% depending on agreement. This came to be in 2012 vide Social Security Laws (Amendment) Act. 2012 (No. 5 of 2012).

A study titled “Labour Law, the Business  Environment and Growth of Micro

and Small Enterprises” in  Bangladesh last year by ILO noted some  laws and regulations from labour that were perceived to have a high probability of becoming growth traps.  Such laws forced businesses to stay smaller or remain unregistered.  

According to ATE in Tanzania, labour laws have been cited as one of the reasons that make some  businesses to refuse to formalise, but it needs to be studied further, for the full impact to be documented. 

Dr Wilbert Kapinga of Mkono & Co notes “Tanzania overhauled its employment and labour laws in 2004 when it enacted the Employment and Labour Relations Act, Act No. 6 of 2004 (“the Employment Act”) and the Labour Institutions Act, Act No. 7 of 2004 (“Labour Institutions Act”). Whereas the Employment Act provides for labour standards, rights and duties, the Labour Institutions Act constitutes the governmental organs charged with the task of administering the labour laws.

Citizens’ Voices

Michael Paul, MBA candidate SUA:

Tariffs and taxes are among the most prominent barriers for businesses to flourish. The new government ought to remove trade barriers and abandon cumbersome taxes. Also,  interest rates should be reduced so that capital to venture into businesses can affordably be obtained. 

Godson Elias, Mbeya:

Tanzania Shillings continues to be volatile. There is need for taking deliberate efforts to improve our ability as a country to produce more and add value. It is also high time the government should consider subsidies for for agriculture and industrial sector. Taxes should also be increased on imported goods that can be produced at home.

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