Estimate: share of unreported wages in construction down to 32.1% in Latvia

The share of shadow economy in the Latvian construction sector has dropped in all aspects, and the share of unreported wages declined from 34.6% in 2016 to 32.1% last year, said Baiba Fromane, the head of the Latvian Partnership of Building Contractors, citing the latest study on shadow economy in construction.

The share of unreported revenue in the sector last year dropped from 30% to 26.7%, the share of illegal workers declined from 20.5% to 17.6%, the share of bribes increased from 15.1% to 15.5%, but still it has dropped from 17.9% in 2015.

The overall share of shadow economy in the construction sector has dropped from 40% in 2015 and 38.5% in 2016 to 35.2 % in 2017.

"No other sector shows a 5% drop in shadow economy in two years. No doubt, there is still much to be done, but the launched reforms are heading in the right direction," said Fromane.

She said that the main factors reducing the share of shadow economy are preparation of the general collective agreement on the minimum wage, electronic working time records, more active work of the State Revenue Service and application of reverse VAT payments in the sector.

Fromane said that the goal in the coming years is to reduce the share of shadow economy in construction at least to the average share of shadow economy in the whole country.

The study on the shadow economy in the construction sector was commissioned by the Latvian Partnership of Building Contractors and conducted by Business Against Shadow Economy (BASE) organization in cooperation with the Stockholm School of Economics in Riga (SSE Riga). Latvijas Fakti pollster in April 2018 surveyed 250 representatives of the construction sector.

    Related articles
    0 comments
    Comment
    Comment using your social media profile
    Economy
    Economy