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National Interests: Priorities and Security
 

Factors contributing to the informal employment in Russia and fiscal policy measures to eliminate them

Vol. 18, Iss. 7, JULY 2022

Received: 25 December 2018

Received in revised form: 16 January 2019

Accepted: 31 January 2019

Available online: 14 July 2022

Subject Heading: ECONOMIC POLICY OF THE STATE

JEL Classification: E69, H21, H26, H30

Pages: 1260–1283

https://doi.org/10.24891/ni.15.3.490

Andrei I. MASTEROV Financial Research Institute of Ministry of Finance of Russian Federation, Moscow, Russian Federation
andrey-masterov@yandex.ru

https://orcid.org/0000-0002-5531-1047

Subject. The article focuses on the growing informal employment in Russia, escalating during the rise of computational and network technology and unstable economic situation, which may possibly complicate the collection of fiscal revenue.
Objectives. The research pinpoints and analyzes key factors fueling the informal employment and informal sector of the economy. I also describe to what extent the Russian legislation is in sync with the contemporary aspects of the development of remote cooperation and network technology. The article sets out what fiscal measures should be undertaken to counter the tax evasion among the self-employed population and reduce the informal sector.
Methods. The research involves methods of factor, systems, dynamic analysis.
Results. The article illustrates key factors fueling the informal employment and growth in the informal sector of the economy. I provide the rationale for amending the fiscal policy for countering the tax evasion and tightening the government and tax authorities’ control over the informal employment and remote cooperation between the self-employed people and their customers.
Conclusions and Relevance. The intensive development of network and information technology, deteriorating situation in the country, frequenting crisis phenomena, employment difficulties represent the key triggers of the informal employment. Under such circumstances, the State should hold the coordinated fiscal policy to regulate remote forms of employment and operations of network platforms on the Internet. The findings can be used to determine what legislative and fiscal efforts can be taken to regulate the remote cooperation activity of the self-employed people without being formally employed, so as to counter the informal sector of the economy and prevent the self-employed people from evading taxes.

Keywords: informal employment, self-employment, taxation, network platform, fiscal policy

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