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Work on the black market – losses for the budget of over 29 billion lei in 2008

Work on the black market brought losses to the state over the first 9 months of 2008 of over 29.5 billion lei, representing 50.8% of the underground economy, an analysis of the finances minister shows, based on the data of the National Commission of Prognosis.
According to finances, the share of the « unobserved » economy in the GDP went up by almost one third over the last four years, increasing from 14.5% in 2004 to over 21% in 2008. Thus, potential income in the economy which were not collected for the budget reached 58.1 billion lei over the first nine months of 2008, with 11.3% of GDP.

The highest share in the underground economy is made by lack of payment of contributions for salaries and the salaries given “ in an envelope” – 29.556 billion lei ( almost 5.8% of the GDP), followed by fiscal evasion as a result of non-payment of VAT – 23.815 billion lei ( 4.6% of the GDP) and the informal sector – 4.745 billion lei ( 0.9% of the GDP).

The informal sector is made up of tailors, auto mechanics, barbers, decorators, plumbers, teachers with private lessons or people who hire their house for the summer.
“Despite the economic growth of the last years, the share of the budgetary income in the GDP stops at about 32%, while the share of public expenditure grew significantly” it is shown in the finances analysis.

The minister of finances gave as an example the share of collection from construction taxes in the GDP, which was kept the same over the last five years, although the sector recorded an annual rate of growth of 17-20%. It is clear the state loses every year through the non-payment of taxes 6.8% of the GDP the highest share being work on the black market, followed by fiscal evasion.

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Tuesday, February 10, 2009