Abstract
Construction sector is on of the most closed and corrupted sector in many countries. Belarus is no exception. For understanding the real situation with corruption and tax evasion in construction sector in Belarus the survey of 50 construction companies was done. According to achieved results, a large share of respondents agreed that some companies of the sector have hidden income, pay salaries in envelopes and spend some money for resolving problems with state institutions. At the same time construction enterprises that participated in tenders on municipal procurement underline many problems in this specific sphere. All these problems can be divided by administrative, economic and problems associated with the existence of corruption and the shadow economy. The most popular answers include corruption, unfair competition and imperfect legislation. On the base of international experience and the results of the survey we develop the list of recommendations for decreasing the level of corruption and tax evasion in construction sector that will support to create favorable environment for business development of the country.
Highlights
The problems of corruption and tax evasion are very relevant for most countries in the world
The distribution of companies was as follow: 20 construction enterprises were interviewed in Minsk and Minsk region; 30 organizations of construction sector were interviewed in other 5 regions of Belarus (6 organizations were interviewed in Grodno region, 6 – in Brest region, 6 - in Vitebsk region, 6 – in Mogilev region and 6 – in Gomel region)
Problems associated with the existence of corruption and shadow economy Personal agreement, nepotism, everything is decided in advance; Corruption; Unfair competition; Non-transparency of competitions’ procedures; Non-commercial relations between companies; The system of kickbacks; Untimely notice of the beginning of the competition
Summary
The problems of corruption and tax evasion are very relevant for most countries in the world. In some states the level of corruption remains very high, while in other countries it is at a rather low level. The size of corruption and tax evasion can be differ by country, and by sector. Construction is traditionally an area with a very high risk of corruption and the development of shadow economy. In the Baltic States, there are a number of empirical and research works, which analyse the level of shadow economy in details. In order to underline the importance of the topic for Belarus we analise the level of shadow economy in the international comparison in the third part of the paper
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