Tag: Underground Economy Index 2014

ETCO and FGV / IBRE release the Underground Economy Index

informal economyThe ETCO-Brazilian Institute of Ethics in Competition and the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV / IBRE) released in June the 2014 Underground Economy Index (IES). According to the indicator, last year, the informal market amounted to R $ 826 billion. The figure is equivalent to 16,1% of the Gross Domestic Product (GDP) and shows a decrease of 0,2 percentage point in comparison with the index obtained in 2013. The small variation points to a scenario of almost stagnation in the trend of falling participation. of the informal economy in Brazil. In the last 10 years, the index has decreased by 4,8 percentage points.

The IES uses a set of statistical data to estimate the size of activities not declared to the government, such as smuggling, piracy, tax evasion and informal employment. The survey, which until 2012 had registered a significant drop in these activities, started to have a slower rate of reduction in recent years. One of the main reasons was the retraction of the industry and the growth of the service sector, which has higher levels of informality. According to the researchers, the reduction in the fall may also be related to the slowdown of the Brazilian economy in the last year.

 

HIGH TREND

The study authors believe that the worsening of the economic scenario in 2015 may cause a reversal of the index. “The economic slowdown started at the end of last year, so that the results of the crisis will only be really felt in its next edition, referring to the year 2015 ″ analyzes Samuel Pessoa, a researcher at FGV / IBRE. According to him, the measures taken by the government to combat informality, such as the exemption of some sectors of the economy and policies aimed at small entrepreneurs, although effective, are not enough to curb informality in this scenario.

For the country to be able to continue reducing the underground economy, new initiatives by the government are necessary. “In order for us to resume the significant drop in informality, it is essential to seek measures capable of simplifying and rationalizing the tax system; modernize the collection system and make compliance with the law less painful for the population. It is also necessary to continue and accelerate the structural changes that we seek for society, such as, for example, the increase in educational level and the reduction of the unemployment rate ”, says Evandro Guimarães, president of ETCO. “We are at most 40% of the way to go.”

ETCO's partnership with FGV / IBRE aims to monitor developments and draw society's attention to the size of the informal economy. The survey released in June had a wide repercussion in the media, with reports in 124 media outlets. The list includes important newspapers such as O Estado de S.Paulo and Correio Braziliense and major news portals, such as G1 and Exame.com.

To expand the spread, this year ETCO prepared a video about the results of the research, which can be seen at this address.

 

 

Underground Economy Index dramatically slows down in 2014

Underground Economy Index 2014Disclosed on November 12, the share of the underground economy in GDP, measured by the ETCO's Underground Economy Index (IES) in conjunction with the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV / IBRE), should reach 16,2% in 2014. The result represents a decrease of 0,1 percentage point in comparison with 2013 and indicates a tendency towards a slower pace in reducing informality.

In absolute values, the estimate is that the underground economy - the production of goods and services not reported to the government, which is outside the national GDP - exceeds the R $ 830 billion mark in 2014.

In the evaluation of FGV / IBRE researcher, Fernando de Holanda Barbosa Filho, the result was directly impacted by the low growth of the economy in the year. “The economy is slowing down, as well as credit, and employment has grown little. This has a direct impact on formal work, which naturally falls, giving way to informality ”, he explains. According to him, not even the tax exemption policy applied in 2013, which now becomes definitive, was sufficient to face the low economic performance and maintain the downward pace of the underground economy. "However, were it not for the exemptions, we could have an even more severe picture", analyzes the researcher.

For him, even the implementation of MP 615/13, which extends exemptions for new activities, should not change the scenario much from now on, “because the relief of the tax burden has already reached most sectors and its effects have already been captured” .

For ETCO's Executive President, Evandro Guimarães, “there is no denying the importance of exemptions for the economy as a whole, but, as far as we can see, their effectiveness with regard to formalization, tends to stabilize”. According to him, these measures should be analyzed from a more lasting perspective. "It is the moment to carry out the long-awaited tax simplification, so that the tax relief reaches more broadly the productive sectors of the economy".

What is certain is that informality brings direct losses to society, creates an environment of transgression, stimulates opportunistic economic behavior, with a drop in the quality of investment and a reduction in the growth potential of the Brazilian economy. In addition, it causes a reduction in government resources for social programs and investments in infrastructure.

Informal economy should exceed R $ 830 billion in 2014, estimates FGV

GRAPHIC G1Value represents 16,3% of the country's GDP, according to a survey. 
Entities see greater slowness in reducing informality.

The share of production of goods and services not reported to the government, which is outside the national gross domestic product (GDP) - as in the informal market - should reach the mark of R $ 833,9 billion this year, according to the estimate of the Brazilian Institute of Competitive Ethics (ETCO), together with the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV / IBRE), through the Underground Economy Index (IES).

The value represents 16,2% of the country's GDP - almost stable in relation to the 16,3% share that the underground economy represented in the GDP of 2013. According to the entities, the result indicates a tendency towards slowing down the reduction of informality .

Source: G1.globo.com | 12/11