(3 Minutes Read)
Those involved in the informal business do not pay taxes and do not use formal business channels which leads to intensifying dollarization in the economy as most of the tuck shops selling illegal imported goods
Zimbabwe’s capital, Harare, is undergoing a rapid transformation which has seen the proliferation of small, informal shops, known locally as tuck shops. They have created employment for many of the country’s citizens who are in the informal sector. However, neither the stores nor their staff pay tax, posing a challenge to the organized retail sector and at the same time presenting a complex challenge for the government in formalizing the economy.
But a few economists feel that the trend is not a good development. They argue for the emergence of large formalized enterprises. Those involved in the informal business do not pay taxes and do not use formal business channels, which leads to intensifying dollarization in the economy as most of the tuck shops sell illegally imported goods. This leads to trade bypassing the country’s tax system and therefore not bringing money into the state coffers.
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https://trendsnafrica.com/zimbabwes-economic-growth-to-double-in-2025/
As the number of informal tuckshops continues to rise, the evasion of taxes and regulations presents a thorn in the side of policymakers. There’s a proliferation of smuggled and counterfeit goods that are unfairly competing with local products since the smuggled goods are not subject to taxation and import duties.
