The black market and taxes are two reasons for the emergence of the informal economy
money is low income, low income levels in the State, and the high rate of unemployment, lead to higher crime rates, and if they continue their incomes decline will lead to the emergence of the perfect crime and therefore an increase in the size of the underground economy . "
That's sentiments were teaching in the College of Business and Economics at the University of Mosul, Dr. Hashim Mohammed Aercop in his marked (the informal economy in the neighboring countries of Iraq), defining the informal economy as: that part of the economy, which is hidden deliberately from the eyes of people workers as a to avoid taxes and regulations, laws, or because the goods and services they produce are not legal, or because the economic activity hidden not be announcing it was deleted from the gross domestic product (GDP).
and the Department of Aercop the informal economy: the sector, legal and illegal sector. He explained that the legal sector reveals the economy of self-sufficiency, while the illegal sector is part of the shadow economy or underground economy.
and knew Aercop the informal economy that: these activities included National Accounts that are far from the channels stated economic, and far also control and economic management States, which are either that the activities of illegal or illicit activities or informal.
considering the legitimate activities legal activities but are not officially registered and profits generated by the to interfere in the result of the national economy, and these activities: handicraft projects unlicensed street vendors, domestic service, and practice lessons privacy.
The informal activities: referring Aercop that it is in illegal activities and is officially registered in the national accounts, which are sources of funds have dirty money, funds of illicit origin and prohibited by law, including: drug trafficking, currency counterfeiting, corruption, and production of drugs, and the distillation of alcohol, and the money monopoly, and distribution of cannabis and cigarette smuggling, and entered the betting and gambling and prostitution, and theft of all kinds.
attribute the Aercop reasons for the emergence of the underground economy to: taxes, which counted Aercop is responsible for an underground economy. He explained that with the increase in tax rates increase incentives for smuggling.
Aercop indicates that the increased administrative complexities of deliberate or unintentional result of the efforts of dealers resort to the rear doors. Or so-called black market, says that the government if Maodat administrative complications for example, in order to obtain licenses or statements, this work will lead to the emergence of a range of beneficiaries who, at the end of these procedures in exchange for gratuities or kickbacks or bribes.
stressed Aercop need for the State develop laws prevent or prohibit certain activities, because the individuals and institutions that those activities are to wrap around those laws and circumvented.
and the impact of the hidden economy, talk Aercop the existence of positive effects, one hand operation helps to solve the crisis of unemployment, and increases in employment rates, because underground economy does not need official approval and to a certain level of scientific and to the specific business. Economy and affect the balance of payments, it helps to reduce imports from abroad, thereby helping to reduce the deficit in the balance of payments to States.
and also helps to reduce the social burdens of many layers of people that apply the principle of self-sufficiency. And the negative effects of this economy, is represented by the opinion of Aercop in: Enjoy income hidden, utilities and public services do not pay their taxes.
as is the seriousness of the underground economy, in the case of employment of illegal funds in the areas of Multi-investment, and that it leads to higher rates of growth Economic and create new jobs, but the motive for the employment or investment of these funds is an economic as it is related to hide the fact that the source shelter from the pursuit of law.
It also leads to lack of health data and information on which statistics are national and thus indicators are derived that is appropriate for the development of economic policy .
and is the scarcity of goods in the formal economy as a result of price controls, rationing or distribution may significantly increase their prices in the economy of the black market. And differences in the rate of economic growth, Where there is the underground
"Truth is everlasting, but our ideas about truth are changeable. Only a little of the first fruits of wisdom, only a few fragments of the boundless heights and depths of truth, have I been able to gather"