To read the full version of this content please select one of the options below:

Russia's untaxed shadow economy is expanding

Friday, August 2, 2019

Subject

Russia's burgeoning grey economy.

Significance

Russia's grey economy accounts for one-fifth of GDP and employs one-fifth of the workforce, according to official statistics, and the trend is upwards. The sector sometimes overlaps with crime but often plugs gaps in retail and services which the official economy and state provision cannot fill, and offers people a chance to boost meagre incomes. The urge to avoid taxation seen as excessive narrows the base of honest taxpayers, forcing government to impose higher levies on them.

Impacts

  • The social security system will come under more strain from low tax payment, an ageing population and a poor savings culture.
  • The increase in the pensionable age is likely to boost informal employment.
  • Freelance consultants and other professionals, often working remotely, will boost white-collar informal employment.

Related articles

Expert Briefings logo
Stay up to date
Sign up to the Expert Daily Briefings email alert and receive up-to-the-minute analysis of global events as they happen.
*If your university does not have access to Expert Briefings, visit our information page to find out more.