Shopping malls have emerged as an essential component of modern urban towns because they can host many types of businesses that sell various services and goods in a single location. The many businesses make shopping malls the ideal destination for most consumers.
However, although these bustling business hubs can bring tremendous economic gains to the locality and the nation, they also can incur costs and result in expenses for taxpayers and governments.
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There is no discussion about shopping malls that can be complete without considering the effects of shopping malls, both good and bad. The effects may not be immediate but also the future effects.
Advantages for Taxpayers
The presence of shopping malls in any locality, whether urban or rural, can affect the property values in the area. The increased foot traffic and economic activities in the shopping malls will increase the demand for properties in the neighbouring areas. This will result in higher property taxes.
It is essential to remember that shopping malls have other advantages. For example, they are major employers providing employment opportunities for diverse individuals, from retail workers to managerial roles, with varying levels of responsibility.
Establishing the jobs may encourage a healthy local economy and reduce unemployment in the area.
Many shopping malls have retail establishments and a variety of other amenities, including restaurants, supermarkets, clothing shops, hair salons, movie theatres, and other entertainment venues.
Some shopping malls act as tourist attraction sites. This has the potential to create employment and improve the quality of life for locals, further stimulating economic activities in the area.
Some governments partner with shopping mall management to facilitate upgrading skills for locals by starting training programs. The partnerships can improve the availability of employment opportunities and reduce poverty.
Disadvantages for Taxpayers
Though shopping malls have a lot of advantages for taxpayers, they also have disadvantages. The popularity of shopping malls can increase traffic, resulting in congestion, particularly during busy shopping hours. This congestion could severely influence the quality of life of the residents and commuters.
At the end of the day, the congestion will cause traffic jams and longer commute times. The commuters will use more vehicle fuel. Shopping malls pose a challenge for many small, locally owned businesses.
These businesses may need help to compete with larger businesses in the malls, which normally have lower prices. This can lead to the collapse of many local businesses, and this will cause the local community to lose some of the most valued traditional businesses.
Increased traffic is good for businesses in the malls. However, the increased economic activities associated with shopping malls can sometimes lead to higher prices for by the business community in the surrounding areas. This might raise the cost of living, making it more challenging for residents to afford the necessities of daily life.
Hence, shopping malls have the potential to adversely affect the areas where they are located. These adverse effects can include an increase in the number of crimes, an increase in the amount of noise pollution, and a decrease in the quality of life.
Advantages for Governments
Many times, the development of shopping malls results in economic growth and development for the whole area. Shopping malls have the potential to attract new investments in the area, new businesses, and attract tourists. All of which contributes to a more lively and dynamic economy.
The new developments and businesses will generate substantial tax revenue for governments. Businesses located within shopping malls must pay sales, property, and corporate taxes, all of which are then contributed to the public coffers.
Through the economic activities transacted in them, shopping malls have the potential to significantly contribute to a region’s total economic growth. The increased consumer spending, the creation of new jobs, and the rise in property values are all factors that can contribute to a more prosperous economy. A prosperous economy results in more tax revenue.
Shopping malls have the potential to play a critical role in urban projects, which aim to revitalize neglected regions and create new opportunities for businesses and people alike during urban redevelopment initiatives.
Disadvantages for Governments
Governments depend on economic activities to generate tax revenue. Many shopping malls are based on retail business models which are susceptible to consumer behaviours. Once a shopping mall has been constructed, the government may need to step in and take more control over the mall’s operations and the type of businesses that will be located there.
As a result of this interference, it may be challenging to guarantee the local community that the mall is a reflection of the community’s values and priorities. The construction and periodic maintenance of shopping malls can be costly.
To accommodate the increasing volume of traffic that large shopping malls attract, changes to the infrastructure, such as roads and public transportation, may be required. This will most likely be sponsored by the government.
Even though shopping malls have the potential to generate a substantial amount of tax money, they also have the potential to result in a loss of tax revenue from smaller, locally owned businesses. This is because they may close their doors because of competition from the large shops in the shopping malls.
The building and operation of shopping malls can have environmental repercussions, such as increased energy consumption, waste generation, and pollution. These are activities managed by the government. The government may incur the costs, which will be passed on to the taxpayers as increased taxes or fees.
Conclusion
Shopping malls can significantly benefit the local taxpayers and the government by boosting businesses, the quality of life and generating financial gains. Governments should carefully evaluate the possible adverse effects and try to minimise them by balancing economic development with community well-being. This will help guarantee that shopping malls help local economies flourish.
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