Author: Fernanda Bompan

Source: DCI (SP) - 22/07/2010

SÃO PAULO - The underground economy, also called informal, goes through a downward process reaching 18,4% of the Gross Domestic Product (GDP) in 2009. The information was released yesterday, the result of an unprecedented study carried out by the Brazilian Institute of Competition Ethics (ETCO) and the Brazilian Institute of Economics of Fundação Getulio Vargas (Ibre / FGV). The percentage is part of the index that measures the production of goods and services that are not covered in official data.

The number represents the amount of R $ 578,411 billion of production that involves monetary transactions resulting from informal and even illegal acts, such as tax evasion or the attempt to avoid costs resulting from compliance with the legislation applied in the activity in which it operates .

According to the executive director of ETCO, André Franco Montoro Filho, the value projected in the study draws attention if one considers that the Brazilian underground economy surpasses the entire economy of Argentina. On the other hand, the entire Brazilian economy represents the underground economy in the United States. “The number released is very large since it is almost R $ 600 billion on the margins of the country's formal economy,” he says.

The researcher from Ibre / FGV and responsible for the study, Fernando de Holanda Barbosa Filho, points out that the numbers are part of an estimate, since only in September will the data from last year from the National Household Sample Survey (PNAD) be released, used to calculate the index.

Barbosa Filho also explains that there has been an evolution with regard to informal GDP in recent years. “In general, the underground economy of developed countries represents 10% of its GDP, in emerging countries this proportion is around 30% of this nation's GDP. We fall short of developed countries. However, since 2003, the index shows a drop ”, contextualizes.

From 2003 to 2009, the index went from 21% of GDP to the 18,4% estimated for last year. Despite this result, in absolute figures within the comparison, there was an increase from R $ 357 billion in 388 to R $ 2003 billion in six years. “This is because there was a growth in GDP in current values ​​within the period”, justifies the person responsible for the study. In comparison with 578, the percentage was 2008%, which represented R $ 18,8 billion in absolute values ​​and R $ 563,794 billion due to the monetary correction (exchange rate) of 590,808.

Reasons and solutions

The explanation for the percentage drop in informal GDP in six years, in Barbosa Filho's assessment, is due to a number of factors. Among these, he points out the changes in Brazil's economic growth regime; the increase in competition in the globalized world "," which requires increased investments and, thus, the need for credit, only obtained if the company is formalized ". Other explanatory elements indicated are the reduction of bureaucracy with the entry into force of Super Simples and the evolution of the collection system.

“Anyway, in order to continue to reduce the percentage of the underground economy, it is important to have a drop in informality. To this end, reducing the volume of taxes charged would make it easier for more people to avoid tax evasion, ”he says.

In addition to reducing the volume of taxes, Barbosa Filho also indicates a greater reduction in bureaucracy and the maintenance of a heated economy. In this last aspect, he says that the expansion of GDP around 7% forecast for this year may facilitate that the underground economy reaches 18% of GDP. "It is feasible, but it is not possible, now, to say the number exactly", he says.

For Franco Montoro Filho, in addition to informality being related to organized crime and precarious working conditions, it brings harm to all of society. “According to the tax burden, tax evasion is estimated at R $ 200 billion, while the government invests R $ 30 billion. In addition, the producer loses money because he faces unfair competition. This gives rise to the idea that tax evasion is the way to make a profit. The result is the drop in the generation of jobs and income and the smaller expansion of the Brazilian economy ”.

The movement of the informal economy in Brazil was R $ 578 billion in 2009, which represents 18,4% of GDP, against 21% in 2003.