O Globo - 03/07/2011

The informal economy has decreased in Brazil and this has been reflected in the creation of formal jobs and an increase in tax collection. Some factors contributed to this formalization, among them the tax simplification for micro and small business segments (like SuperSimples), increase in exports and legal imports, and access to credit markets. In addition, states and city halls began to offer benefits (premiums, IPTU discounts, etc.) to consumers and users of services that require the issuance of invoices.

But, although these advances have occurred, the size of the underground economy in Brazil is still amazing. A recent study by the Getúlio Vargas Foundation, at the request of the Brazilian Institute of Ethics in Competition (Etco), estimated the informality index at 18,3% of the Gross Domestic Product, a value that would have corresponded to R $ 663,4 billion last year. The study is based on the demand for money in the economy and its relationship with formal credit operations. There is a mismatch between these two factors, as the circulation of money is more than proportional to the usual financial transactions, which masks the underground economy. IBGE data on the labor market also help in this estimate, since, according to the agency, almost half of the workforce in the six main metropolitan regions of the country remains without a formal contract.

The FGV study is a yellow light, as there is a stagnation in the process of relative decrease in the underground economy. In absolute terms, there was even an expansion, since, in 2009, the estimated number for informality in Brazil was R $ 632,9 billion (18,5% of GDP, slightly above the 18,3% in 2010). It is possible that the positive factors that contributed to the reduction of informality are no longer producing effects, which makes further progress necessary. Even with the simplification, the tax burden remains excessive, as well as the bureaucracy for calculating and collecting taxes, noted Etco's executive president, ambassador Roberto Abdenur, commenting on the FGV study.

Labor charges can also be seen as a stimulus to informality. Were it not so, the rate of workers with formal ties could not be restricted to a level of 50% in metropolitan regions. It is expected that some mechanisms, such as the individual entrepreneur, will have some effect in this effort to reduce the underground economy. Likewise, in the specific case of Rio de Janeiro, the multiplication of Pacifying Police Units (UPPs), coupled with a greater presence of municipal power in the favelas, may also favor the formalization of small businesses in these communities. In any case, without an effective national formalization effort, as Ambassador Abdenur pointed out, the underground economy in Brazil will remain at levels well above those observed in developed countries, such as the United States and nations of the European Union.