By commerce and tourism
Monaco’s economy is geared toward finance, commerce and tourism. Accordingly, tourism greatly affects the economic progress of the state since the government strenuously promotes Monaco as a tourist and convention attraction. As evidence, it accounts for close to 15% of the annual revenue, as the Principality of Monaco became a major centre of tourism due to the popularity of Monte Carlo Casino sometime during the 19th century. Moreover, it levies no income tax and has low business taxes. The residents pay tax in the form of 19.6% value-added tax on all goods and services. It doesn’t have any commercial agriculture for the state is considered as 100% urban.Regardless of the fact that it is the second smallest independent state in the world, it was still noted for being a haven for wealthy people and a major banking centre. Consequently, the principality has successfully sought to diversify services and non-polluting industries. It managed to retain monopolies in a number of sector involving tobacco, telephone network and postal service. Its 2011 per capita income amounted to $188 409 and it also managed to sustain its unemployment rate in a single-digit percentage (2% in 2012).
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