|On 31 January 2013, the Center for the Study of Democracy (CSD) and the Friedrich Ebert Foundation in Bulgaria, hosted a public discussion at the press center of the Bulgarian Telegraph Agency, presenting the latest policy brief on the scope of the hidden economy in Bulgaria for the period 2011 – 2012.|
Mr. Alexander Stoyanov, Director of Research at the Center for the Study of Democracy, opened the discussion with the remark that the Center has developed and applied the Hidden Economy Index for businesses and the population since 2002. He explained that the index indicators include various aspects of the phenomenon, such as undeclared employment, hidden turnover, VAT fraud, etc. Mr. Stoyanov underlined that, in order to decrease the share of hidden economy in the country, the state should provide stimuli for citizens and business to come to light. According to him, it would be adequate to tie the size of health care and retirement contributions to the quality of the services provided.
Ms. Regine Schubert, Director of the Friedrich Ebert Foundation in Bulgaria, expressed her gratitude to the Center for the Study of Democracy and its research team for the fruitful partnership. She reiterated that the hidden economy is one of the major problems in Bulgaria that hinders the country’s development, and noted the urgent need for reforms in the judiciary and the administration.
Mr. Martin Tsanov, Analyst at the Economic Program of the Center for the Study of Democracy, presented the latest data from the analysis of the hidden economy in Bulgaria for 2011 – 2012. He noted a slight decrease in the values of the hidden economy indexes for businesses and the population. According to the research, the drop in tax evasion is a positive result from the improved macroeconomic environment in the country, as well as the strengthened government measures for adherence to the tax laws. Mr. Tsanov pointed out that instances of unreported employment have decreased, while the youth and long-term unemployment have increased. Despite improvements in the accountability of the National Revenue Agency and other regulators, most regulatory agencies have yet to develop adequate mechanisms for accountability. The lack of established mechanisms for public reporting and accountability feed doubts about corruption in the regulatory agencies.
Mr. Todor Yalamov, Senior Analyst at the Economic Program of the Center for the Study of Democracy, shared an observation that the share of the natural economy in the country has increased. He noted that, while an increased share of the natural economy may have some negative effects for the development of the country in the long run, the natural economy’s potential positive effect is in improving the quality of life in low-income groups.
Agenda (Adobe PDF, 145 KB)
Press Release (Adobe PDF, 260 KB)
Presentation by Mr. Martin Tsanov, Analyst at the Economic Program of the Center for the Study of Democracy (Adobe PDF, 1.06 MB)
CSD Brief No. 37: The Hidden Economy in Bulgaria: 2011 – 2012
Media Coverage (in Bulgarian)