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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:A retail perspective of the informal sector
Authors:Broom, M.
Joyce-Clarke, C.
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:informal sector
retail trade
Abstract:The informal sector has become the focus of much debate among economists, business strategists, local authorities and development planners. Emphasis is often placed on the significance of the informal sector as far as South Africa's economic and political framework is concerned. At the heart of such discussions lies the crucial issue of definition. Although much scholarly activity has been directed towards measurement, no universally accepted definition has emerged. This paper provides a definition of the retail component of the informal sector. The authors first evaluate various definitions of the term 'informal sector'. Thereafter, they define the retail component of the informal sector. This amounts to identifying the variables that are relevant in a retail context, i.e. those that distinguish between formal and informal retail activity. Using the payment of GST (General Sales Tax) as the main variable, the authors propose classifying those retailers with GST exemption certificates as the recorded, formal retail sector, and those that pay GST on purchases of goods for resale, the informal unrecorded retail sector. To test this definition, empirical research was undertaken in Khayelitsha township in Cape Town. The findings revealed that the size of the informal sector in Khayelitsha extends far beyond that of the formal retail sector. Bibliogr., notes, ref.