The Government Of Zimbabwe Has A Difficult Battle From Informal Traders
Harare, the capital of Zimbabwe, is rapidly changing, and one result of this is the rise in tuck shops—small, unofficial stores.
Despite the fact that they have given many of the nation’s unemployed residents jobs, neither the stores nor their employees pay taxes.
As a result, the government, which seeks to formalize the economy, faces a difficult struggle as they drive out large shops and wholesalers.
According to economist Farai Mutambanengwe, a nation would normally prefer for its economy to be mostly composed of large, formalized firms, thus this is clearly not a desirable trend.
“It goes without saying that the quality of your CBD decreases the instant you see unofficial firms taking over the economy. It lowers the homes’ worth,” he claims.
However, it also has the unintended consequence of causing individuals to stop paying taxes and use official business channels, which leads to the dollarization of the economy and eventual informality.
He claims that all of these things are detrimental to the economy.
The government is worried that since the majority of tuck shops sell unlawful imported items, the transaction will evade the nation’s tax system and not contribute to state coffers.
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