The Russian state budget loses $90bn in taxes as businesses hide up to 20% of GDP in the shadows, claims Finance Minister Anton Siluanov.
With a GDP of about 60 trillion roubles ($1.8 trillion), that
means at least 9 trillion roubles ($250 billion) is generated by
opaque transactions, Finance Minister Anton Siluanov told Echo
Radio in Moscow.
Based on an aggregate tax burden of 35 percent, the shadow
economy accounts for at least $90 billion in unpaid taxes every
year, he said.
"Big money is hiding in the shadow economy" Siluanov says.
"Bringing “grey salaries” out of shadows is our
task on the regional and the federal levels," he adds.
Getting paid off the books in order to avoid taxes is called a
“grey salary” in Russia. The minister says that increasing
insurance premiums from employers is the main reason for paying
unreported wages.
If small businesses come out of the shadows their share of GDP
could amount to 40-50% compared to the current 19%, RBC quotes
Minister of Economic Development Andrei Belousov as saying.
About 18 million people are employed in the shadow economy,
according to his estimates. Solving the problem of "shadow
business," could bring the share of small business in Russia to
developed countries’ levels, says Belousov.
Research Institute Global Financial Integrity has evaluated
Russia's shadow economy at 46% of GDP. According to its report
$211.5bn illegally left the country during the period from 1994
to 2011.
According to the World Bank estimates Russia’s shadow economy is
3.5 times larger than in other G8 countries. Low efficiency
of political governance and widespread tax evasion are cited the
main reasons for it.