The problems of the informal economy in Kosovo

AuthorHamdi Hoti - Rifat Hoxha - Remzi Ahmeti
PositionFaculty of Economics, University of Prizren - Faculty of Economics, University of Prizren - Chairman of the audit Committee, KRM. UNITETI sh.a. Mitrovic
ISSN 2410-759X
Acces online at
Balkan Journal of Interdisciplinary Research
IIPCCL Publishing, Tirana-Albania Vol. 1 No. 3
January 2016
The problems of the informal economy in Kosovo
Hamdi HOTI
Faculty of Economics, University of Prizren
Faculty of Economics, University of Prizren
Chairman of the audit Committee, KRM. UNITETI sh.a. Mitrovic
Today the biggest obstacles in the growth of total revenues in the state budget is
undoubtedly the enormous growth of the informal economy.
In Kosovo in recent years, this phenomenon is quite common, according to research
some 40% of the economy is estimated that the informal economy in the country belongs.
Therefore Kosovo urgently needs rapid economic development, because it is time that
the state institutions to work out even more so as the problems and obstacles that
influence the growth and development of the economy of Kosovo, to be reviewed by
experts of economy and take adequate measures and immediate to overcome the problems
in the shortest time possible.
- The aim of this work is the diagnosis of the current economic situation in Kosovo;
- Raising concern for the losses they are experiencing Kosovo from the informal
economy which is applied with the above percentage and in various forms in our
In the paper the reasons for the growth of the informal economy which are numerous,but
will focus more on the key issues which will be given recommendations for solving
The paper has theoretical and practical value and is suitable for raising awareness of
entrepreneurs in the informal economy, as soon as their informal businesses spend in
regular businesses under the laws of Kosovo.
Keywords: Economy, Business, Informal Economy, Economic Development.
The informal economy in Kosovo
The informal economy is a vague term open to many different interpretations
nowadays. With the “informal economy” means a set of unregistered economic
activities, which are characterized by non-payment of tax and social security
obligations, or attempts to avoid matches with certain legal standards and
administrative procedures (Bizneseve, 2015).
Informal economy should be seen in relation to different types of countries, after
the existence of the informal sector in developing countries is often characterized
by the potential of this sector to increase economic investment, and revenue growth
in the formal sector. (Gerxhani, 2002).
This definition excludes criminal activities (such as smuggling, traffication,
prostitution and many other negative phenomena etc.), and activities marginal
tax- free (such as work in the household and agricultural activity for the maintenance

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