Some aspects of share transaction in Tanzania

What you need to know:

Corporate chiefs sell shares of their companies for various reasons including the need to raise capital from the general public that can be used to invest in a new business or expanding an existing one

One may wonder why the government, including Tanzania’s, would force investors in some sectors to go public by way of listing in stock exchange. Among the arguments include transparency. The key issue is that once listed in stock exchanges, companies become more transparent. The process of issue Initial Public Offer (IPO), for example, makes open some key business issues of these companies. By publishing prospectus, for example, a company makes a lot of public disclosure of its business. Inter alia, its ownership structure, assets, liabilities, sales volumes, sales revenue and profits over the years are made public, including projected ones. This transparency is very important for, among other things, taxation purposes. It helps in taming tax evasion as companies in the stock market can hardly hide key variables that determine the amount of tax due to them.