SMEs contribute about 6.5 pc to GDP: Yaninen

Business
Source:
The National, Thursday July 14th, 2016

SMALL to medium enterprises contribute about 6.5 per cent to the national gross domestic product (GDP), National Development Bank Investments chief executive officer Des Yaninen says.
He said the Government hoped to increase the number to 500,000 SMEs by 2030.
“I would say about two million people out of the seven million people in the country are in the informal sector already,” Yaninen said.
“If the Government is to archive the target of 500,000 small to medium enterprises by 2030, it’s just a matter of graduating those people from the informal sector into the formal sector.
“And to graduate them from informal to formal, that’s where you have to go through the licensing, business name with IPA (Investment Promotion Authority), opening bank accounts, formally register them with town or city authorities, councils.
“Once you are formally registered, that’s where you will start to contribute to the formal economy. That’s when you will pay taxes.”
Yaninen said this was assuming that by 2030, the country should not be as reliant on the extractive industry.
“The informal sector is good,” he said.
“Like betel nut for example. Hundreds of millions of kina are circulating in the betel nut trade. But it is outside the formal economy. So we’re losing out on taxes and all that, sales tax and so many of these incomes.”