Underground economy accounted for 27,1% of Brazilian GDP in 2008 (UOL)
Source: UOL, 14/05/2009
São Paulo, May 14 (EFE) .- The money handled by the so-called “underground” economy corresponded to 27,1% of the Brazilian Gross Domestic Product (GDP) in 2008, revealed a study released today by the Getulio Vargas Foundation (FGV).
The “underground economy” includes the clandestine and illegal sale of goods, products or services that violate price fixing or the rules imposed by the Government, a practice that gains strength in times of crisis.
This practice, which ranges from informality to tax evasion, has increased in Brazil, according to the study, due to “the growth in tax revenues”, which had an incidence of 55,5% in the growth of the underground economy, and unemployment, with a degree influence of 18,8%.
The report, prepared at the request of the Brazilian Institute of Ethics in Competition (Etco), also pointed out that “excessive bureaucracy and corruption” had a 16,9% share in the increase in the index, while the decrease in exports in relation to GDP influenced with 8,8%.
The global crisis and the appreciation of the real against the dollar have led many companies to violate the rules imposed on exports through illicit sales and tax evasion, the report details.