Question 1

The Black Economy

Every country has its economic activity that sustains its citizens. According to the laws of the country, reliable economic activity that sustains the needs of a particular household needs to be registered.  The economic activity has to have some certain rules and regulations which it’s entitled to. However, there are some of the economic activities that are not recognized by the government. They operate using fraudulent means. They are unrecorded and also untaxed by the government. This kind of economic activities that are neither known by the government nor do they follow taxation rules are referred to as black economy.

The black economy is an economy that continues to take a different form and continues to grow. It is an economy that is mercilessly ruining a legit business day in day out. Majority of legit business organs station are crying foul due to the activities of the black economy. The black economy is widely influenced by a number of activities. It’s not stagnant but rather oscillates around technological, commercial, and all the social landscape shift.

These time of economy is highly acknowledged and embraced very fast by the participant. It’s majorly supported by values and assumptions that it’s a victimless crime. Majority of the small business enterprises feel that the black economy is ruining their business, by the competitors who are a participant in the black market are feeling what is being referred to as an unfair advantage.

Therefore a black economy is a business that does not follow the laid down rules and regulations.  It rather engages in unlawful activities such as tax evasion. In the process, they thrive since customers preference is on cheap good, unlike expensive legit goods.

Phoenixing

 Australia, as a continent has witness industrialization and revolution.  A lot of companies are emerging and taking over the new markets. During the process of operation, the business is likely to incur massive losses which might ultimately lead to its closure. The business can become liquidated.

When a business is under liquidation and then closes up but opens to continue offering the same services, then it can be referred to as being in a state of phoenix.  In other words, phoenixing is an illegal activity which is prosecuted by law. It occurs when a given company decides to create a new business for survival. It’s usually done with the aim of avoiding to pay the outstanding debts to the employees, its creditors and also paying the recommended tax.

Phoenixing, therefore, is an activity that brings a lot of damages to the subscribers of that particular company. For instance, the creditors and the employees who were expecting