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Parallel Economy
- 1. ITS ORIGIN, SIZE AND IMPACT ON THE MAINSTREAM ECONOMY
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- 8. Simply put, parallel economy often could be demonstrated as hidden economy of a country. People or business entities when do not show their exact income as per government rules the income comes under parallel economy. The informal economy includes unreported income from the production of legal goods and services, either from monetary or barter transactions - hence all economic activities which would generally be taxable were they reported to the state (tax) authorities. In general, a precise definition seems quite difficult as the informal economy develops all the time and adjusts to changes in taxes, sanctions from the tax authorities and to general moral attitudes.
- 9. Parallel economy exists due to various reasons and they are as follows: ď‚· High tax rates implemented by the government. ď‚· Complicated tax paying procedures and policies. ď‚· People believe that their money is not going to be properly utilized by government as their trust on government is less. ď‚· High inflation which puts tax payers under high tax paying brackets. ď‚· People do not get enough return on their paid taxes. ď‚· Involvement of government agencies and officials in corrupt practices. ď‚· Insufficient laws and their implementation to counter such activities.
- 12. COMPONENTS OF A BLACK MARKET ECONOMY
- 22. HOW DOES HAWALA WORK?
- 27. Black money in Swiss banks - Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries: TOP 5 COUNTRIES India - $1,456 billion Russia - $ 470 billion UK - $390 billion Ukraine - $100 billion China - $ 96 billion India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. What about other international banks?