Russia's shadow economy employs 15 million people

Russia's shadow economy employs 15 million people

Russian Deputy Prime Minister Tatyana Golikova said that about 15 million Russian people are employed in the shadow economy.

"According to the latest data, their number reached 15 million people," TASS cited her as saying.

In addition, Golikova commented on the forecast that the number of those in the working-age population will decline by 2 million people by 2025. These data do not cause alarm in the government, she said.

The Deputy Prime Minister noted that "in fact, the number of employed persons" in Russia "is significantly less" than the working-age population. According to her, a decline in the working-age population can be compensated by removing of informally working Russians "out of the shadow".

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to Vestnik Kavkaza, noted that it is impossible to determine how many citizens are are not formally employed. "No one will report on working without the labor contract. Therefore, Golikova only voiced the estimates based on interviewing people who agreed to provide information to Rosstat. Of these, some may not work at all, respectively, the real number of such citizens be more, or less. Only the census provides more accurate information," he said.

"The total potential amount associated with the loss of income tax payments, payment of contributions to the social fund system and all other funds can be up to 4 trillion rubles per year. But it should be understood that some people working in the shadow sector, forced to evade taxation - they earn too little to earn a living and  pay taxes. And there is a very thin line here: if one makes wrong calculations, people who do not burden the state with an appeal to social employment services will turn out to be unemployed and ask the government for help," Alexander Safonov pointed out.

Professor of the RANEPA faculty of Finance, Money Circulation and Credit Yuri Yudenkov, said that the problem of shadow employment is the problem of shadow business in the first place. "People work, receive a backdoor salary and, unwittingly, find themselves in a shadow economy. They are not to blame for the fact that their employers do not pay social contributions for them. That is, they need to deal with the business that organizes such activities. I can assume that a small business in the whole country works on the edge of a gray business, this is true. But the data of 15 million people voiced by Golikova, in my opinion, is noticeably overestimated," he said.

"In general, the shadow business means that all service sectors, medicine, schools, receive less money. People find themselves in unequal conditions: one works, pays pension contributions, pays social insurance, but has no time to go to a hospital, dies ahead of time, while his savings are used by other people who don’t pay taxes," Yury Yudenkov said.