SA's shadow economy to rise, warns ACCA
“There was a decrease in the overall size of South Africa’s shadow economy’s share of GDP since 2011; a positive sign that efforts to curb its impact have been implemented in recent years. But that’s the end of the good news, as the future trend is profoundly opposite,” says Pat Semenya (pictured), head of ACCA South Africa.
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The shadow economy, also known as the black market, is a global phenomenon that affects all countries, more so developing countries. This percentage of the economy involves the trade of goods and services which is kept under the radar, therefore eluding tax. It includes any unreported income from even the production of legal goods and services, and not only only illegal business transactions.
The shadow economy to 2025 estimates that the shadow economy represented 23.29 percent of GDP in 2016 - totalling an approximate R1,000 billion; a figure forecast to rise to 24.19 percent of GDP by 2025.
The measurement of the shadow economy is generally complex, as it requires estimation on concealed economic activities. The mathematical analysis of the factors behind the shadow economy predicted a global decrease in this economy, from a high of 23 percent in 2011 to 21 percent by 2025. It has been reported, however, that several countries, South Africa included, are expected to experience an increase in the shadow economy by the year 2025 as a percentage of GDP.