Source: Cruzeiro do Sul Online, 15/05/2009

Driven by the advance of the tax burden, which led to a real flight of companies in the formal market, the underground economy went unscathed by the worsening of the global crisis, and grew 27,6% from December 2007 to December 2008.

This is what the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre / FGV) and the Brazilian Institute of Competition Ethics (Etco) revealed yesterday when they announced the Underground Economy Index, which measures the development of companies and activities involved in the informal market , or in tax evasion practices.

This was the strongest advance in a period from December to December of the historical series of the index, which is quarterly and started in 2003. Informal data from the Brazilian Institute of Geography and Statistics (IBGE) were used to calculate the index, and information on monetary circulation calculated by the Central Bank (BC).

Advances

When presenting the results of the indicator, Ibre / FGV researcher Fernando de Holanda Barbosa Filho commented that, by observing the historical series, it is possible to perceive that the underground economy indicator goes hand in hand with the progress of the formal economy . One feeds the other. Income earned in the formal economy is spent in the underground economy, and vice versa, 'he said. He explains that the increases in GDP also indicate an increase in currency circulation in the country.

However, the growth of the shadow economy cannot be explained only by the beneficial influence of the formal economy. For the president of Etco, André Franco Montoro, many companies or small entrepreneurs have also chosen to abandon the formal market as a way of not paying taxes.

According to Montoro, studies show that, currently, the underground economy already represents around 20% to 30% of Brazil's GDP. But the next performance results of the underground economy, which will be related to the first quarter of this year, may show a much less positive scenario.