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Areas of Expertise

Informal Economy

Informal Economy
© ILO/M. Crozet

Popoy, business owner

Popoy owns an export trade business. He hires five workers on a regular basis and as his market position is good, he is thinking of expanding his operations, and hire more workers.

 He has just obtained a loan from the country’s first investment bank that is specialised in enhancing the productivity of growth-oriented businesses. Popoy also gets support from a business association, which is registered as an employer organisation.

 Popoy has registered all his employees, who get full employment benefits. This comes as a cost but he thinks that the well-being of his employees has contributed to higher productivity and staff motivation. He is a bit frustrated though by the unfair competition of his competitors. Indeed some employers in his sector, who are not declaring their workers are creating unfair competition as they can provide cheaper goods and services than companies respecting the rules, including health and safety obligations, payment of social security contributions and working conditions. His employers’ organization is working with the government to address this issue.

Popoy pays taxes under a simplified taxation format introduced by the Government for small enterprises.  This tax scheme means that he pays a lower tax rate than large enterprises on the basis of a relatively simple annual tax declaration form.   

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