Citadele: businessmen believe grey economy has a tendency to decrease
73% of Latvian businessmen believe the volume of grey economy in their represented industry is either low or nonexistent. In addition, the grey economy has a tendency to reduce, according to results of Citadele Index. Businessmen generally believe the new tax reform will not have a major impact on the proportion of grey economy in Latvia.
The majority of interviewed businessmen (60%) believe that the volume of grey economy in their represented industry is either small or very small. 13% of businessmen believe their industry has no grey economy at all, whereas 23% of businessmen believe the proportion of grey economy is either large or very large. Compared with spring, there are 18% more businessmen now who believe the proportion of grey economy in their industry is either small or non-existent. 5% less businessmen believe the proportion of grey economy is large.
71% of service industry representatives and 65% of production industry representatives are very optimistic. They say that the proportion of grey economy in their respective industries is either very small or non-existent. Grey economy is mentioned as the most serious problem the most often by trade companies (30%). When asked if grey economy is in decline or on a rise, 46% of businessmen said the current estimated volume remains unchanged. 30% believe it is in decline, whereas 6% believe the grey economy is on a rise. Decline of grey economy is mentioned most often by businessmen working in construction industry (46%). Representatives of most other industries believe grey economy remains unchanged. Businessmen’s views in regards to the effect Finance Ministry’s new tax reform could have on grey economy were more positive in spring 2017 than they became at the end of 2017. While in spring the majority (37%) of interviewed businessmen believed this reform would help reduce grey economy, now the majority of interviewed businessmen (45%) believe it will not have a major impact. 24% of interviewed businessmen believe the reform will help reduce grey economy.