Raymond Winder says the country must incentivize persons in the informal sector to transition into the formal sector.

The economic contribution of the Bahamas' informal sector is not reflected in the country's gross domestic product (GDP), which has led Managing Partner at Deloitte & Touche (Bahamas) Raymond Winder to assert the need to incentivize persons in the informal sector to transition into the formal sector.

Winder said that the informal sector represents an important part of any economy.

Speaking with Guardian Business yesterday, Winder said that the informal economy is growing to the extent of challenges faced with the country's current economic state. Winder explained that low economic growth and a high unemployment rate are factors that underscore a rise in activities in the informal sector.

"We are not expanding the economy and as individuals seek to improve their status in life, you would see a number of those individuals move from the formal sector to the informal sector. I know it's growing, but I don't know what percentage it represents," said Winder.

Winder said although activities in the informal sector are not considered a part of GDP, the sector represents an "excellent starting point" for entrepreneurs.

"This particular sector really does not make the kind of contribution to the government in its taxes and various fees that are a part of government revenue. So, to that extent its not good for the country," said Winder.

The transition from the informal sector to the formal sector requires incentive, as Winder said.

"I think one of the most important things is to set up more facilities and provide opportunities currently in that sector to sort of gradually get into the formal sector. We need incentives to make that happen," he said.

One way of doing so, Winder pointed out, was to reduce business license fees and other related business fees.

Winder also highlighted the role of the Bahamas Chamber of Commerce and Employers' Confederation on the matter.

"The organization that has the greatest responsibility in that sector is the BCCEC and organizations like that where individuals can go to receive knowledge on how to improve their business," Winder said.

Xian Smith, Guardian Business Reporter

Click here to read more at The Nassau Guardian