BELGRADE – By the end of March 2015, the Expert Group for Countering the Shadow Economy, headed by the National Alliance for Local Economic Development (NALED), will prepare and propose measures to serve as a foundation for the adoption of the national program for countering the shadow economy.  The focus of these measures, which will be submitted to the Government's Coordination Body for Countering the Shadow Economy, will be the adoption of incentives for entrepreneurs who do business legally and penalties for businesses that do not.

The measures will draw upon USAID-supported research that NALED conducted as part of a two-year project to strengthen competitiveness in Serbia.  A recent Ipsos Strategic Marketing survey showed that 50% of respondents were convinced that the shadow economy decreased in the past year, but 59% are not satisfied with those results.  More than 60% of citizens and businesses believe the Serbian Government is determined to curb illegal business.

One challenge for the creators of the national program is a lack of reporting.  According to the survey, at least 63% of citizens would not report an employer using informal employment, and 50% of businesses would not report competitors acting illegally.  Citizens said the main reason they would not report was the fear of losing their jobs (60%), while entrepreneurs would not report because they lack confidence in the penalty system (71%).  In addition, survey results showed that 33% of respondents do not receive fiscal receipts, and 52% of respondents never ask for them.  The program will need to devise measures that motivate citizens to demand purchase receipts every time.