Posts Tagged ‘economy’

  • The Face of Informality

    Date: 2010.02.14 | Category: business and finance | Response: 1

    economy-informal

    The only advantage of the informal economy for the worker is that he does not pay taxes. At least, those taxes for businesses like the Super Simple. On the other hand, is not formally gets in the way other things in life that worker. It is more difficult, for example, rent a property or get a loan, in addition to being vulnerable to the tax assessment and monitoring of the various regulatory bodies. Who lives in large Brazilian cities may have seen the hustle and bustle of the street when the “rapa” (tax) appears.

    Tackling informality is a flag of the government, after all, with it, the collection decreases. The General Law for Micro and Small Enterprises, promulgated in December 2006, is an attempt by the government to reverse this problem. The government’s aim with the new law is to take about 1 million businesses of informality, ie 10% of total informal.

    Some people are not interested in getting out of informality. This applies to people who, for example, sell pirated products. But most seem to dislike being in this situation. Among men, 31% were in the informal market in 2003 because they failed a job. Moreover, men are responsible for 66% of these companies. For 32% of women in the informal power to increase family income, according to the Brazilian Institute of Geography and Statistics (IBGE). The educational gap of these people is one reason for being in this situation. Only 2% of the owners of informal enterprises had higher education in 2003. This finding, of course, is one of the reasons for 53% of enterprises do not make any kind of bookkeeping. Moreover, not all companies can profit, or receive any more value than the costs. In 2003, 73% had a record profit. The average profit of these companies was $ 911.

    This lack of boundary between business and family, basic characteristic of informal enterprises, it is also clear in the physical structure of the company. More than 30% of companies operate within their own home.