Gray zone costs every citizen one average salary every year

BELGRADE - The shadow economy costs every inhabitant of Serbia an average salary every year, according to a recent survey by the National Alliance for Local Economic Development (NALED).

The total sum amounts to around EUR 3 billion that Serbia does not invest in development and it is therefore not surprising that 92 percent of business respondents indicated that the biggest problem was low purchasing power, which they faced due to unfair competition, the NALED Bulletin has said.

In a survey NALED conducted in cooperation with the United States Agency for International Development (USAID) in Serbia, 84 percent of the respondents said that knocking down prices had been the first problem caused by the shadow economy and 79 percent saw the first problem reflected in a decrease in sales and product placement.
“All of this eventually reflects in lower salaries of employees and total revenues of their households as in 44 percent of the cases, it all ends up in dismissals and wage cuts,” says the explanation of the survey.

Chief of Party at the USAID Serbia Business Enabling Project Joseph Lowther has said that the biggest problems with the grey economy occurred where complicated regulations have made doing business more difficult and where it is not easy to detect undeclared workers, which is particularly true of the sectors of construction, transportation, catering and agriculture.

Goran Pekez, director of corporate affairs and communications for the Adriatic region at the Japan Tobacco International, noted that another big problem was “smuggling of goods, which deprives the state of substantial revenues from customs duties and taxes.”
“The state needs to take a clear stance about not tolerating illegal...