Analytics, Forum, Legislation, Lithuania, Markets and Companies, Shadow economy

According to Butkevicius, the Government devotes particular attention to combat the underground economy – enhanced work of law enforcement agencies allows to reveal large-scale underground economy activities. Nevertheless, the prime minister noted that even the strictest measures will not put an end to illegal payments, tax fraud or smuggling if it is tolerated by the public. Thus Butkevicius stressed that everyone must say a strong "no" to the shadow economy.

The head of Government says fight against the shadow economy is not in vain – 4 surveys showed that it has brought a positive result. Based on Professor Friedrich Schneider's estimates, from 2013 to 2014 the extent of underground economy declined in Lithuania by 1% and totalled 27.1% of GDP. The professor forecast that in 2015 the underground economy in Lithuania will stand at 25.8%. The expected reduction of 1.3% would be the largest among all European Union member states.

No Country for Shadow campaign is organised by business-labelling initiative Baltoji Banga and association Investors' Forum together with partners – the Government, the President's Office, the State Tax Inspectorate, the State Social Insurance Fund and this year also in cooperation of over 100 non-governmental organisations.

Ruta Skyriene, Chairwoman of the Board of Baltoji Banga initiative, said that at present the underground economy accounts for a quarter of Lithuania's GDP. As a result the state and its residents lose nearly EUR 9 billion every year. The major part of the underground economy is composed of tobacco, alcohol and fuel smuggling as well as tax avoidance by concealing the real income through illegal work or illegal pay.