1. Finding a Path to Formalization in Benin : Early Results after the Introduction of the Entreprenant Legal Status
- Author
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Benhassine, Najy, McKenzie, David, Pouliquen, Victor, and Santini, Massimiliano
- Subjects
INFORMATION ,TAX RATES ,TAX EXEMPTIONS ,TAX ,BANKING SYSTEM ,BUDGET ,COMMUNICATION ,DATABASES ,DEPOSIT ,IMPLEMENTING AGENCIES ,TAX EXEMPTION ,IMPLEMENTATION ,TECHNICAL ASSISTANCE ,MONITORING ,BUSINESS REGULATION ,PERFORMANCES ,BENEFICIARIES ,ADVERTISING ,PRODUCTIVITY ,BANK LOAN ,COMPETITIVENESS ,RETURNS ,REGISTRATION SYSTEM ,ADMINISTRATIVE PROCESS ,COLLATERAL ,ENABLING ENVIRONMENT ,BUSINESS ,SHARES ,INSTITUTIONS ,LOANS ,MEDIUM ENTERPRISES ,BOOKKEEPING ,INFORMATION SERVICES ,CHECK ,IMPACTS ,TRANSPARENCY ,TAX FORMS ,ONE-STOP SHOP ,BUSINESS TRAINING ,BANK ACCOUNTS ,MARKETS ,COMMERCIAL LAW ,PROFIT ,INFORMATION BANKS ,FINANCE ,BUSINESS PERFORMANCE ,ENTERPRISE DEVELOPMENT ,INTERNATIONAL FINANCE ,PHONE ,FINANCIAL STATEMENTS ,SMALL BUSINESSES ,QUALITY ,MICROENTERPRISES ,ACCOUNTS ,INSTITUTION ,ARTISANS ,CERTIFICATE ,ACCESS TO BANKS ,DUMMY VARIABLE ,SMALL BUSINESS ,PERFORMANCE ,TRADE SECTOR ,MARKET ,PHONE NUMBER ,BUSINESS REGISTRATION ,UNFAIR COMPETITION ,FINANCIAL PRODUCTS ,FIRM PERFORMANCE ,OWNERSHIP ,PROTOCOL ,TAX RATE ,ECONOMIC ACTIVITY ,ELECTRICITY ,SELLING ,IMPACT EVALUATION ,BANK ACCOUNT ,REGISTRATION PROCESS ,TAX REGIMES ,TAX REGIME ,ACCOUNT ,CUSTOMERS ,TAX OBLIGATIONS ,NETWORK ,LIMITED LIABILITY ,EXCHANGE ,BUSINESS PLANS ,ACCOUNTING ,OPEN ACCESS ,RESULT ,COMMERCIAL BANK ,BUSINESS PERFORMANCES ,BUSINESS SERVICES ,DIRECT COSTS ,BANK FINANCING ,COST ,INTERNATIONAL DEVELOPMENT ,LIABILITY ,BUSINESS PLAN ,HUMAN CAPITAL ,GOOD ,LICENSE ,TURNOVER ,CONTACT INFORMATION ,TAXES ,ACCESS TO BANK ,PROTOCOLS ,BANK LOANS ,CHAMBER OF COMMERCE ,DATABASE ,DUMMY VARIABLES ,ADMINISTRATION ,BUSINESS ACTIVITY ,OPTION ,COMMERCE ,PROFITS ,MOBILE PHONE ,LOAN ,BUSINESS FACILITATION ,QUALITY OF SERVICES ,DEVELOPING COUNTRIES ,INTERNATIONAL BANK ,COMMERCIAL BANKS ,FUTURE ,CONTRACT ,SALES ,CONTRACTS ,RESULTS ,TRADING ,NEW MARKETS ,LEGAL ENVIRONMENT ,BUSINESS ENTRY ,INSPECTION ,BUSINESS MANAGEMENT ,BUSINESSES ,LEVY ,DEBIT CARD ,CASH TRANSFERS ,CHECKS ,INSPECTIONS ,SHARE ,TAX SYSTEM - Abstract
In April 2014, the Government of Benin launched the entreprenant status, a simplified and free legal regime offered to small informal businesses to enter the formal economy. This paper presents the short-term results of a randomized impact evaluation testing three different versions of the entreprenant status on business registration decisions, each version including incremental incentives to registration: (i) information on the new legal status and its benefits, (ii) business training, counseling services, and support to open a bank account, (iii) tax mediation services. The study included 3,600 informal businesses operating with a fixed location in Cotonou, Benin, which were randomly allocated between three treatment groups and one control group. One year after the program launch, all versions of the program had significant impact on formalization rates. The impact was 9.1 percentage points in the first treatment group; 13 percentage points in the second group; and 15.8 percentage points in the last group. The program had a higher impact on male business owners, with more education, operating outside Dantokpa Market, in sectors other than trade, and that before being offered the incentives to formalization had characteristics similar to businesses that were already formal. Data from a second follow-up survey, which is expected to take place in March 2016, will explore the impacts on other outcomes, like business performances or access to banking.
- Published
- 2015