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Just over half of entrepreneurs have encountered illegal businesses in their field
More than half of entrepreneurs have encountered illegal business in their field.
This is evidenced by the data of the National Business Indicators study conducted by the Chamber of Commerce and Industry. 36% believe that the illegal sector is larger and makes up a quarter of the market.
More than half of entrepreneurs (51%) have encountered the shadow sector in their industry, and 40% estimate the share of the grey zone in their industry at 10% and 36% of respondents (a quarter of the market).
Most said that the shadow business hinders the development of their company, and 27% called the loss of profit "enormous." The respondents named the main characteristics of the illegal sector as lack of registration, non-payment of taxes, refusal to obtain permits and gray wages.
Roman Kvinikadze, founder and CEO of NappyClub, a Russian brand for moms and babies, says the problem is serious in the baby trade.
The market says that in the current economic reality, it is difficult not to fall into a gray area. Base rates are high, and income taxes are growing, and in 2025 they will grow to 25%. Not only will the minimum wage increase, but non-tax payments from enterprises, such as housing and communal services, will also increase. According to analysts, this could provoke the growth of the shadow sector.
At the same time, it is very difficult for legal companies to compete in such a situation, says Tikhon Smykov, president and managing partner of Inventive Retail Group. His company also sells equipment and devices.
Pavel Brun CEO of Masterprof We are usually a supplier to large federal networks and work mainly through them. Some of our products are imported from China. As for the shadow segment, most of the problems are ultimately related to the fact that many companies still do not work with "whitewash", and this concerns VAT optimization, as well as payroll calculation. It is very difficult for us to compete on price with these two products, because their prices are very high. If we talk about wages, then all expenses on wages, including taxes and funds, make up about 45% of the amount that a person receives. So, if companies do not include these costs in their prices, it is very difficult for us to compete, and these companies remain on the market. Despite the fact that their number is small each year, their presence worries them greatly. The efforts of tax authorities in this direction are noticeable, but the Federal Tax Service mainly deals with large companies with visible turnover and at least somehow brings order to these companies. But if you have a small or medium-sized business, it is not a fact that the Federal Tax Service has not yet reached them and will reach them in the near future.
According to the CCI survey, 31% of the entrepreneurs surveyed said that there is a need for stronger control and regulation to avoid the growth of the shadow sector. But experts also talk about the opposite trend. For example, according to the Union of Users of the Digital World Platform, in the taxi industry, more than 70% of drivers cannot comply with the requirements of the new law.
According to the latest Rosstat data for 2022, the size of the country's non-observed economy amounted to almost 11.5% of GDP. For comparison, in 2021, the figure did not exceed 10.5%.