Author(s): Osman El Sharnoubi
Egypt’s vast informal economy has drawn the focus of government officials in recent years. Authorities have been looking to merge the informal economy with the formal economy as quickly as possible in order to boost official economic figures, which have been marked by low rates of growth and which officials say do not reflect the true size of the economy.
The government’s incentive to integrate the informal economy is clear. With an estimated value of LE 2 trillion, unregistered businesses are a substantial source of potential tax revenues for the state. The government is also eyeing the money collected by state bureaucrats through the extortion of unregistered businesses, a widespread practice in the informal economy that operates through kickbacks.
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