THE ALARANTS NUMBERS OF INFORMALITY
Source: TotalMovéis - São Bento do Sul / SC - 30/07/2010
Consumer Bulletin RS -CGI Furniture
A study carried out by Fundação Getúlio Vargas, in partnership with Etco (Brazilian Institute of Competition Ethics), revealed that informal and illegal activities totaled R $ 578 billion in 2009.
The value represents 18,4% of the country's GDP (Gross Domestic Product). The analyzed segments comprise activities ranging from the work of street vendors, who survive largely due to the sale of pirated products, to drug trafficking.
What we have to take into account when deciphering these numbers is that the informality that appears in the study ends up causing damage to legal companies, as they have to pay more taxes to offset the taxes evaded by others.
But what makes a person or company prefer to remain outside the law instead of seeking to regularize their situation? The answer may lie in the high costs and the enormous bureaucracy involved in the creation and formal maintenance of an enterprise. Because of this, the option for informality seems advantageous or even the only alternative of survival for both the worker and the small business. However, what is often not analyzed is that, if you suffer the consequences of inspection or labor action, for example, the great risk of the entrepreneur who lives in informality is not being able to prosper and increase his capital.
Another wrong idea, which helps to encourage the option of not regularizing the company's activities, is to believe that there will be a reduction in the profit margin. If the entrepreneur thinks that he will get a percentage well below the expected if he has to collect all taxes, he certainly will not opt for formality. However, if you look at it from another perspective, you will realize that there are many advantages offered by formalization, such as increased capacity to negotiate with suppliers, access to working capital, and greater business volume.
In other words, even if we are still in a country that makes life difficult for those who want to establish and maintain their business, the formalization initiative is always welcome and should be encouraged by all sectors of society. Because, only in this way, we will no longer have to regret figures like those published by Fundação Getúlio Vargas.
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The alarming numbers of informality
Source: ParanaShop - 26/07/2010
A study carried out by the Getúlio Vargas Foundation (FGV), in partnership with Etco (Brazilian Institute of Competition Ethics), revealed that informal and illegal activities, called underground economy, totaled R $ 578 billion in 2009.
The value represents 18,4% of the country's GDP (Gross Domestic Product). The analyzed segments comprise activities ranging from the work of street vendors, who survive largely due to the sale of pirated products, to drug trafficking.
What we have to take into account when deciphering these numbers is that the informality that appears in the study ends up causing damage to legal companies, as they have to pay more taxes to offset the taxes evaded by others.
But what makes a person or company prefer to remain outside the law instead of seeking to regularize their situation? The answer may lie in the high costs and the enormous bureaucracy involved in the creation and formal maintenance of an enterprise. Because of this, the option for informality seems advantageous or even the only alternative of survival for both the worker and the small business. However, what is often not analyzed is that if you suffer the consequences of inspection or labor action, for example, the great risk of the entrepreneur who lives in the informal sector is not being able to prosper and increase his capital.
Another wrong idea that helps to encourage the option of not regularizing the company's activities is to believe that there will be a reduction in the profit margin. If the entrepreneur thinks he will get a percentage well below the expected if he has to collect all taxes, he certainly will not opt for formality. However, if you look at it in another light, you will realize that there are many advantages offered by formalization, such as increased capacity to negotiate with suppliers, access to working capital, and greater business volume.
In other words, even if we are still in a country that makes life difficult for those who want to establish and maintain their business, the formalization initiative is always welcome and should be encouraged by all sectors of society. Because, only in this way, we will no longer have to regret figures like those released by FGV.
