The Largest Shadow Economy Schemes in Ukraine: Budget Losses and Trends for 2025
Analysts from the Economic Expert Platform (EEP) presented updated data on the main shadow economy schemes in Ukraine, emphasizing their impact on the state budget. This information was discussed during the Forum “Dialogue between Government and Business: New Opportunities for the Development of MSMEs,” organized by the Ukrainian Business Council with the support of UNDP.
This is reported by AgroReview
“Envelope” Payments and Unregistered Workers – Leaders of the Shadow Sector
According to experts, the volume of shadow payments to unregistered workers and salaries in envelopes for those receiving the minimum wage has increased to 280–540 billion UAH per year. This results in budget losses of 140–280 billion UAH, significantly exceeding last year’s figures (115–230 billion UAH).
“Salaries in envelopes are the most challenging scheme to combat. We need to strengthen public pressure to address this issue,” stated the head of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danilo Hetmantsev.
Other Major Shadow Schemes and Their Impact on the Budget
In second place in terms of losses for the state are the schemes of “grey imports” and smuggling. The turnover in this segment amounts to 400–640 billion UAH, with budget losses of 120–185 billion UAH (previously 120–167 billion UAH).
Counterfeit and illegal excise goods rank third, reaching a turnover of 126–140 billion UAH over the year, with budget losses of 39–43 billion UAH (in 2024 – 35–40 billion UAH).
Additionally, according to EEP expert group coordinator Oleg Hetman, losses from the following have increased:
- informal self-employment – 12–17 billion UAH,
- the use of individual entrepreneurs (IE) instead of hiring – 12–14 billion UAH,
- underreporting of IE turnover – 9–15 billion UAH.
At the same time, there is a reduction in the volume of some schemes, including:
- offshore operations – 12–14 billion UAH,
- land and real estate schemes – 18–20 billion UAH,
- so-called “VAT frauds” – 13–15 billion UAH.
Overall, according to experts’ estimates, the total annual losses to the state from all calculated shadow schemes amount to about 500–600 billion UAH. If we consider the shadow economy estimate at 30% of GDP, the total volume of losses could reach approximately 1 trillion UAH per year.