CSD: Nearly 30% of Bulgarians conceal incomes

Around 30% of Bulgarians conceal incomes, according to a survey of the Center for the Study of Democracy (CSD) and of the Friedrich Egbert Foundation in Bulgaria.

In 2012, some 29% of Bulgarians concealed incomes, compared to a total of 77.44% in 2003, showed CSD’s data.

The number of people working without a labour contract has significantly decreased over the last 10 years. From 6% in 2003 their share dropped to 3% in 2012.

A possible explanation of the shrinkage of the informal sector is the initial response of businesses to counteract the crisis – getting rid of their employees without formal labour contracts. However, the fact that no workforce returned to the official labour market after the recession shows that a considerable part of the terminated concealed labour relations were not renewed. According to experts, this resulted in increased productivity and a short-term reduction of labour costs. Indirect evidence and the indices’ data showed an increased employment rate in the informal economy. It is very likely to have doubled from 2008 to 2012, reflected in the growth of the long-term unemployment rate and the risk of poverty among the population,” stated the analysis of CSD’s experts.

The informal sector remains widespread, although its rate of growth is slowing down, showed CSD’s survey of the dynamics of the grey economy in Bulgaria. “The tendency of declaring lower remunerations than the actual ones is still widespread and has important implications for the social security system,” the report read.

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