Source: Diário Catarinense - Florianópolis / SC - 22/07/2010

The underground economy, known as the informal economy, represented 18,4% of the Gross Domestic Product (GDP) in 2009, equivalent to R $ 578,4 billion, compared to 21% of GDP in 2003.

This is the result of an unprecedented study that calculates the Underground Economy Index, carried out by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre-FGV) and commissioned by the Brazilian Institute of Competition Ethics (Etco).

According to the person responsible for the study, professor Fernando Holanda Barbosa Filho, the indicator tries to measure all the production of goods and services that has not been communicated to the government. The figure corresponds to a value close to Argentina's GDP.

Barbosa Filho stated that the main factors responsible for the reduction of the underground economy in Brazil were the increase in GDP growth, the increase in the number of people formalized in the labor market and the expansion of the granting of credit to workers.

Other important elements are related to the modernization of the economy, greater commercial opening with the advance of exports and the evolution of collection systems, such as electronic invoices. The reduction of tax bureaucracy, with the establishment of the Super Simples regime, also collaborated.

In the opinion of André Franco Montoro Filho, executive director of Etco, the underground economy reduces investments by Brazilian companies, because part of them does not find incentives to expand their activities if competitors do not pay taxes.

- Taking into account the current tax burden, it is possible to estimate that there is tax evasion of approximately R $ 200 billion per year in Brazil. Imagine how many investments could be made with that amount - he said.