The problems of the informal economy in Kosovo

• Author: Hamdi Hoti - Rifat Hoxha - Remzi Ahmeti
• Position: Faculty of Economics, University of Prizren - Faculty of Economics, University of Prizren - Chairman of the audit Committee, KRM. UNITETI sh.a. Mitrovic
• Pages: 312-318

ISSN 2410-759X

Acces online at www.iipccl.org

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Tirana-Albania Vol. 1 No. 3

January 2016

312

The problems of the informal economy in Kosovo

Hamdi HOTI

Faculty of Economics, University of Prizren

Rifat HOXHA

Faculty of Economics, University of Prizren

Remzi AHMETI

Chairman of the audit Committee, KRM. UNITETI sh.a. Mitrovic

Abstract

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

country.

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

problems.

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