Zanzibar Youth Economic Empowerment Policy
The MoFP introduced a two percent non-final withholding tax through the Finance Act 2021 to raise tax revenues from the agriculture sector. The tax has been imposed on payments made to agro- product suppliers, livestock, and fisheries when supplied to government agencies, millers, and industries. The inception of a 2 percent withholding tax in Tanzania brings mixed policy implications. This raises concerns about whether actual implications mean bringing more individuals into the tax net or increasing the tax burden on the existing taxpayers. Multiple tax and licensing institutions focus on a single youth enterprise. This situation threatens business growth, especially startups (new entrants in the market with a seed or pilot business idea). Startups deal with inconsistency and ambiguity in taxation and inadequate support mechanisms. The Tourism policy in Zanzibar needs to be reviewed for benefits to be more inclusive and sustainable. There are fragmented guidelines for youth development activities in the country, which need to be reviewed and integrated for alignment. The Land Policy, both in Mainland and Zanzibar, needs to be reviewed to provide a base for youth in agriculture to be allocated farming land.
This policy has potential relevance to all issues surrounding business development services (BDS), incubation services, markets, and access to production technologies.
Association programs and/or projects to support the policy implementation
Most PSAs and youth-based organizations are focused on advocacy work and focus less on policy implementation unless engaged by the government or international development organizations.
National policies enforced in a manner that is detrimental to youth enterprise
According to private sector stakeholders, most policies support the country’s development vision. However, specific strategies and implementation instruments do not necessarily consider youth enterprise nature and “diversity among other players. This situation harms the growth and sustainability of youth enterprises. Also, some policies are old and need review to accommodate the changing needs of youth enterprises as they adopt modern business models. Some of these policies and enforcement issues mentioned during the interviews include: The Youth Development Fund, initiated in 1993, is a revolving loan facility that stipulates that every local council set aside 4 percent of their income for youth groups (in addition to 4 percent for women and 2 percent for people with disabilities). The youth-led research, entitled “Efforts to Advance Youth Economic Empowerment, Availability, Accessibility, and Administration of the Youth Development Fund,” surveyed 6,265 youth in three regions (Dar es Salaam, Morogoro, and Dodoma). The research concluded that the fund is currently ineffective and not providing young entrepreneurs with essential capital to start or scale their businesses. Specific findings include the following: Seventy-four percent of surveyed young people have inadequate knowledge of the National Youth Development Fund, which indicates that more work needs to be done to raise awareness. Only eight percent of surveyed young people said they received feedback when applying for the fund. This leads to disappointment and a loss of confidence in applying next time. [77]
Impact of respective policies on youth enterprises
Overall, the policies and practices discussed during focus group discussions have a net positive effect and impact on youth enterprise growth and sustainability. However, since existing policies do not address the changing needs of youth and youth enterprises, and these needs continue to pile up, there is a significant gap between what the current policies offer and the actual demand from youth enterprises. This ultimately affects youth enterprises in terms of their ability to sustain and compete in local and international markets.
Some areas where impact is compromised include:
Limited access to financing. Credits and loan policies are not favorable for youth to invest and engage in economically viable enterprises. Some of the constraints mentioned by the youth include inappropriate and poor product design, lack of special windows for entrepreneurs with specific incentives (e.g., tax breaks), and low awareness of alternative financing options such as venture capital, angel investments, crowdfunding, and guarantee funds. Several youths also mentioned not being aware of the ongoing financial support programs from the government.
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Youth Enterprise Policy Analysis Report
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