Almost 40% of the Ukrainian economy is in the shadows, so reform should be conducted to settle the problem, according to Ukrainian Vice Premier Sergiy Tigipko.
"Around 40% of the economy is in the shadows – almost all economists say this. Some name an even larger figure," he said, answering questions of lawmakers in the parliament on Friday.
The vice premier said that all countries have shadow markets. "Even the United States say that 5% of their economy is in the shadows," he said.
Tigipko said that reforms are needed to bring the country's economy into the open. "Concrete reforms are needed, and [the document] you passed yesterday is a compromise that has to be taken… The adoption of the Tax Code is a large step. We've not taken a whole step forward, but we've moved three quarters [of a step] forward. It's important that the code was endorsed, and in the future we'll propose such reforms," he said.
He said that after the reform is conducted, including during next year, "we'll be able to totally balance the budget."
"A 3.5% of [GDP] deficit is very important. We could index all wages, pensions and social payments. We would not have any debts in the sphere… We should see $10-12 billion being invested in Ukraine each year," Tigipko said.
He added that unpopular reforms had to be carried out. "As for unpopular reforms: we'll try to draw up them very quickly, I think in half a year. We'll manage to [tackle] the main problematic issues that will cause a bad reaction of the public and that have to be explained to people," he said.
He said that much would depend on the present administration by State Tax Administration of Ukraine and Customs Service. "The current administration provokes many questions, so these have to be [answered]. The presumption of innocence that our business has should be canceled de facto," Tigipko said. Interfax-Ukraine
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