Antena 3 CNN Business Do drugs and prostitution increase the revenues to the state budget? The action taken by the authorities to get money out of the black economy

Do drugs and prostitution increase the revenues to the state budget? The action taken by the authorities to get money out of the black economy

Do drugs and prostitution increase the revenues to the state budget?  The action taken by the authorities to get money out of the black economy
17 Iun 2014   •   17:12
To increase budget revenues, Romania will include, as of  September the money collected from illegal activities such as prostitution, drug trafficking and smuggling  in calculating the GDP.

It is a measure that other states have already implemented to surface as much money as possible  arising from the black economy.   Now the recommendations  are coming from the European Union

Romanian authorities have already made calculations showing that the  illegal activities inclusions into the GDP could have an impact of more than 0.2% of  the GDP. For comparison, the United Kingdom estimated that only prostitution and drugs have a contribution of 0.8%, while Italy's GDP would add between 1.5% and 2.4%.

Representatives of the National Institute of  Statistics said that at present the  GDP includes the  unobserved economy, ie legal activities being developed illegally, which vary between 22% and 23% of the GDP. The estimated  value by the National Institute for Statistics for  2012 related to prostitution, drug trafficking and smuggling, is  equivalent to about 1.2 billion Romanian lei.

The amounts advanced  by INS seem small given that, for example, the estimates on  tobacco and alcohol traffic, which according to the Tax Council bring harm to the  annual budget amounting to  RON 2.3 billion. The exact  figures will come in autumn.

It is true, however, that the state would earn more money if such activities should be stopped. And taxed accordingly.


Guest on the show "Daily Income with  Adrian Măniuţiu, " journalist Ionut Balan spoke about the inclusion in  the GDP of  illegal activities such as prostitution, drug trafficking and smuggling.

"Including these illicit activities in the GDP shows an inability of the state to administer them and, paradoxically, these issues become strengths. It is hilarious," the journalist said.

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