Thursday, July 05, 2012 -
The shadow economy in Kyrgyzstan accounts for between 50 and 70 percent of the whole economy, a top government official said on Thursday.
Economy Minister Temir Sariev made the comments during a meeting during a constituent assembly focused on political and economic studies, the Knews.kg agency reported.
“According to various estimates, between 50 and 70 percent of our economy is in shadow,” Sariev said. So we ordered a study of the shadow economy, the first results of which will be ready in a few months. Then we can see how much we do business that is located partially in the shade, where many employers completely hide their income [from the state.”
The shadow economy is also known as the black market, and exists beyond the reach of state tax authorities. Kyrgyzstan’s tax revenues have been falling in recent years, largely due to informal employment where no taxes are collected by the employer.
“At the same time, we have 300,000 businesses [operating in the country],” Sariev added. “Therefore, we must remove the shadows of the economy and build the collection of taxes, then increase income by several times.”
In addition to the overbearing presence of the shadow economy, Kyrgyzstan’s economy is also hindered by high rates of corruption and the near bottoming out of all industrial production.