engleski

A Step to Solving the Problem of Informal Economy

Informal economy is one of the side effects of modern business activities which has not been resolved in the right way even in developed countries and represents a serious problem to numerous economies in spite of a large number of regulatory attempts. Studies indicate that informal economy is reversely proportional the economic development of a country, that is to say that a large part of business activity is conducted in that zone. Anyhow a part of assets acquired in informal economy is returned to the zone of formal economy in a certain way and continues to be circulated there. When the assets acquired in informal economy enter into regular cash flow they ostensibly get the status of regularly acquired assets, they also seemingly appear to have been taxed in some previous business cycle which makes them amnestied in a certain way. Still assets from informal economy are introduced into the regular cash flow through certain business transactions which make it possible. However, what seems to be symptomatic is the fact that when assets gained in informal economy are put into regular cash flow, this activity is manifested as money laundering. The aim of this paper is to throw light on the similarity and relation between money laundering transactions and those which enable introducing money from informal economy and to explore a possible way to potential reduction of the volume of this phenomenon. In order to achieve that we explore and point out the fact that the potential solution to both problems lies in the correlation between informal economy and money laundering which appears in formal business activities. That very aspect offers certain potential for countries to establish some control mechanisms and indicators which will enable these phenomena to be identified and regulated afterwards.

informal economy, money laundering, pre-phase of identifying, two-phase tax collection

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