My thought on the challenge that matters!
Tonga's informal sector is slowly being shaped with the introduction of the new small business tax last week, by the Tonga Ministry of Revenue & Customs - in which I wish to further support it and help all parties involved. For more details please refer to the new small business tax here.
If we take a walk along the waterfront, around town, the villages, or drive around the island on a Saturday morning, from east side to west side, we'll find a lot of these informal sector operators in there - similar to that on the attached image. They are every where, trying to make a living with whatever else little they have.
But do we blame them for operating in this way, and do we target them with new tax deductions to help our government and economy?
This is our own unique Tonga culture - the way people live, and do things. It has been like that for generations now. And if we are to change that culture today - we need to fully understand the informal sector first, and then effectively and consistently apply to them the appropriate initiative and an incentive. This is so that they could be encouraged to buy in to the new idea, and won't be influenced by other factors to revert back to the old ways of doing things.
How are we going to do that?
Our economy is known and also partly well driven by an informal sector in which is not a hidden sector but rather, a very visible, fast growing, effective one, fostering entrepreneurship and representing thousands of domestic jobs throughout Tonga. I think this sector is a tremendous force for local (and global) economic development and we need to think about it that way.
So, I think our challenge here isn't to end squatter townships, waterfronts, villages, or shut down the informal markets - but to educate, engage, and empower those who live and work in them - so they could eventually buy into the idea of the new small business tax regime for the benefit of our small island economic development. And I think this new initiative presents itself with opportunities for both parties and sectors depending on how you see it.
What's your say? Share it with us.
"The luxury economy should be written with an asterisk. *It excludes 2/3 of the world’s population". ~Robert Neuwirth