53% of Georgia's Economy is Shadow

access_time2018-02-21 09:06:26

According to the International Monetary Fund (IMF) survey, the share of black economy in Georgia is 53%.


Mariam Lashkhi, an analyst at TSU Analysis and Forecasting Center, says this is an alarming indicator. In her words, the shadow economy (known as black economy, hidden economy, gray economy, informal economy, cash economy or poor economy) is characterized mainly for developing countries, and Georgia can become less attractive for investors.

" Informal economy envisages mainly  the service area, the same household or transport sector. For example, 20% of the total monthly income of taxis is not accumulated in the budget, " Lashkhi explains.

The analyst believes that  the state must resolve the problem immediately,  namely, by  implementing  legislative amendments.

"The survey is based on the results of 1991-2015, according to which the shadow economy in 2010 was 64%. Now the trend is declining, but the situation is still unfavorable. The tax system should be reviewed. According to Geostat, the average income is slightly above GEL 900, but the fact is that many families do not have such income, so they have to pay extra income. The controlling body must also be created to make the process transparent, "says Mariam Lashkhi.

Statistician Soso Archvadze also shares the initiative . In his opinion,  the Revenue  and Audit Service must perform its duty better.

"As for the results of the International Monetary Fund survey, the figures are slightly overestimated, although the situation is still unfavorable," Archvadze notes.

According to him, even if the shadow economy of Georgia were 20-25% instead of 53%, the situation would not be correspond to a free business environment.

The total volume of shadow economy across  the world is 31,9%, according to a survey conducted by the International Monetary Fund in 158 countries in 1991-2015. The figures for 2015 are as follows: Turkey - 31.38%, Russia - 38.42%, Armenia - 42.59%, Azerbaijan - 52.19%

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