Bulgarian Industrial Capital Association: Grey Economy Is Shrinking

Business | November 5, 2012, Monday // 17:51| Views: | Comments: 0
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Bulgaria: Bulgarian Industrial Capital Association: Grey Economy Is Shrinking BICA Chair Milena Angelova has claimed that the growth in the grey sector of the Bulgarian economy has decelerated by 6% to around 37%. Photo by BGNES

Milena Angelova, Chief Secretary of the Bulgarian Industrial Capital Association (BICA), has claimed that the share of the grey economy in Bulgaria is dropping.

Speaking Monday in the northeastern city of Dobrich, she specified that the 6% deceleration in the growth of the grey sector was partly due to media sensitivity and the increased number of publications on the topic.

The BICA Chief Secretary argued that the most common illegal practice in 2010 had been work without labor contract and the incidence of this problem had decreased.

Angelova explained that people worked under labor contracts which stipulated a fake wage.

"The contract either stipulates the minimum wage or a lower sum but it always includes under the table payment. This is the new challenge," she noted.

The BICA Chief Secretary cited statistics indicating that 64% of employers admitted that work in the grey sector brought quick profits, while 85% claimed that laws were not applied equally.

Angelova argued that the reasons for the existence of the grey economy remained in place.

"The business sector still says that the main reason for operating in the grey sector is not so much the economic incentives but the numerous administrative requirements which are difficult to meet. The much advertised e-government is simply not happening," she added.

The BICA Chair declared that the most common illegal practices included concealed profits, the failure to issue invoices for deals, the nonpayment of profit tax, under the table payments, contraband imports and exports.

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Tags: Bulgarian Industrial Association, BICA, grey economy, shadow economy, e-government, administrative burden, minimum wage, labor contract
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