Who in Ukraine is working in the shadows: a study

Last year, the shadow economy accounted for 47.2 per cent of the total GDP. Compared to 2017, the figures increased from 46.8%.

Кто в Украине работает «в тени»: исследование

Most “tehnizirovannye” sectors of the economy is retail trade and construction, according to a survey KMS.

Author: kiis.com.ua

Кто в Украине работает «в тени»: исследование

The last 2 years, the largest share in the shadow economy amounts to concealment of income by the business.

The last 2 years, the largest share in the shadow economy amounts to concealment of income by the business.

In all regions the level of shadow economy on average is growing at 1.5%. However, in the Northern and Central regions, its level fell by 4.3%.

Last year 3.9 million people in Ukraine worked informally, the state statistics service counted. If you eliminate the black market, informally furnished will be even greater. The shadow economy is hurting the budget. On the other hand, gives businesses the opportunity to survive the crisis.

The level of shadow economy in 2018 amounted to 47.2% of the total GDP, which is a bit more compared to the previous year. This is evidenced by the results of the study estimates of the size of the shadow economy in Ukraine, held in 2019, the Kiev international Institute of sociology in the framework of project SHADOW, funded by the European Commission for the HORIZON 2020 programme (GA no. 778188).

Thus, the level of shadow economy in 2018 amounted to 47.2% of the total GDP and 46.8% in 2017. By region, the level of the shadow economy were distributed as follows: South of 44.7% in 2018 and 43.5% in 2017; the West — 47.6% in 2018 and 43.5% in 2017; East — 46,1% in 2018 and 44.3% in 2017; the North/Center — 45.9% in 2018 and 50.2% in 2017; Kiev — 45.7% in 2018 and 44.9% in 2017.

In all regions there is a growth of level of shadow economy on average by 1.5%, with the exception of the North and Centre where there is a significant reduction of as much as 4.3%.

Most testirovanie sector of the economy – retail trade and construction, where the scale of the shadow economy exceeds 50%, although, unlike other sectors, here in 2018 there was a decrease in level of shadow economy compared to 2017

The components of the shadow economy are three kinds of tax evasion, namely the concealment of income from a business, hiding the real number of employees, hiding the real size of wages paid or wages “in envelopes”. The largest share in the shadow economy in 2018, and 2017 is hiding income from the business, although its share decreased from 60% to 57%. The next largest is the process of hiding the number of employees, its share remained almost unchanged in 2017 and 2018, a Third component is the concealment of wages paid is the lowest share among the components of the shadow economy, and comparatively with the other two, its share increased significantly from 18% in 2017 and 21% in 2018.

The survey of enterprises of Ukraine was conducted in March – may 2019. Method telephone interviews were surveyed 800 owners, managers and top managers of companies across Ukraine except Crimea, and is temporarily controlled by the Ukrainian government areas of Donetsk and Lugansk regions. The survey was conducted using a random stratified sample, covering all regions of Ukraine, sector of the economy and covers different size companies (large, medium, small and micro).