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According to international estimates the share of the hidden economy worldwide accounts for 10-12% of global GDP. In the transition economies however hidden economy reaches one fourth of GDP. Economic analyses show that if the share of the hidden sector exceeds a critical level (around 50% of GDP) it changes the ‘rules of the game’ in the whole economy.
In Bulgaria the tax and tax enforcement burden, ineffective enforcement of laws and administrative barriers for businesses are the main factors stimulating informal economic activities. The publication presents the latest trends and challenges of the hidden economy to the private and public sector. It describes the various manifestations of the hidden economy and assesses its size, scope and characteristics in Bulgaria through six different methods. The publication underscores the necessity of international cooperation in the area of hidden economy. The authors conclude with recommendations for improvement of the legislative and regulatory framework for the business and its implementation.
The publication includes contributions from experts of the National Social Security Institute, the Bulgarian National Bank, the National Statistical Institute, the Agency for Economic Analysis and Forecasting and the Center for Study of Democracy.