The Parallel Economy in Tanzania: Magnitude, Causes and Policy Implications
Wangwe, S M;|Tibandebage, P;|Kilindo, A;|Zuberi, S / 1997

The study was implemented as part of the research programme although the initiative came from the Parliamentary Committee on Finance and Economic Affairs. The study assessed the magnitude and pattern of activities in the parallel economy of Tanzania. It also identified factors and dynamics, which cause the existence and sustainability of such activities. The study found that substantial economic activities fall within the parallel economy. The large part of it exists as a response to the type of policies and regulatory framework in place. The following factors were identified as the main cause that sustain activities in the parallel economy, these includes high and multiple taxes, the presence of laws that are not sufficiently deterrent (or their total absence) and low remuneration or lack of incentives.