Lithuanians far behind Estonians and Latvians in perceptions of shadow economy

The research was done by the international audit, tax and consulting company KPMG which has surveyed the heads of some biggest companies of Central and Eastern Europe.

A year ago, nine out of ten businesspeople in Lithuania said shadow economy was a problem.

Lithuania is particularly far behind Estonia: 83 percent of businesspeople in Lithuania identify shadow economy as an important problem, while in Estonia, only 34 percent. Seventy-three percent of businesspeople in Central and Eastern Europe see black markets as a problem.

The worst situation is in Romania and Bosnia and Herzegovina, where almost everyone surveyed acknowledges the problem.

In Lithuania, as well as in the entire region, the most widespread form of shadow economy was perceived to be tax evasion. While 47 percent of respondents in Lithuania identified tax evasion as the biggest problem in the shadow economy, the percentages were lower in Latvia (39 percent) and Estonia (29 percent).

Twenty-one percent of Lithuanian and 23 percent of Latvian businesspeople thought smuggling as the biggest problem, significantly more than the regional average of 11 percent. Last year, smuggling was perceived as the biggest problem by 36 percent of busnesspeople in Lithuania.

The perception of illegal employment has grown significantly among businesspeople in Lithuania, from five percent last year to 26 percent this year.