Presentation on theme: "T HE I MPACT OF T HE I NFORMAL E CONOMY ON E CONOMIC D IVERSIFICATION IN S MALL S TATES – T HE BVI P ERSPECTIVE Hon. Marlon A. Penn - MP British Virgin."— Presentation transcript:
T HE I MPACT OF T HE I NFORMAL E CONOMY ON E CONOMIC D IVERSIFICATION IN S MALL S TATES – T HE BVI P ERSPECTIVE Hon. Marlon A. Penn - MP British Virgin Islands
C LASSIC D EFINITION OF I NFORMAL ECONOMY “The term “Informal Economy” thus refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements.”
BVI’ S I NFORMAL E CONOMY Unregulated/Legal Activity Tourism related businesses/Jobs Construction Jobs Undocumented /Illegal Activity Gambling Prostitution Sale of Illicit Drugs
S NAP S HOT OF BVI’ S E CONOMY Population of Approximately 27,000 Mainly Service Based Economy Financial Services Tourism Construction Activity Labour Force 13,000 GDP of $951,823 Per Capita $38,500
I NFORMAL E CONOMY ’ S I MPACT ON E CONOMIC D IVERSIFICATION Conclude that the Informal Economy’s Impact to Economic Diversification is Negligible or has more of an Adverse Impact on the Formal Economy. Contributing Factors Amount of Persons operating in the Informal Sector is small Tax System (Payroll Tax system, first $10,000 exempt) Gambling (The Purchase of Lottery Tickets) Sale of Illicit Drugs (Especially Marijuana which is mostly used for recreational proposes)
T HE P OLICY M AKER ’ S P ERSPECTIVE A more coordinated effort for the collection of data on the informal economy is needed, to understand the true impact of this sector to the formal economy.