Socio-Economic Problems
of the Modern Period of Ukraine

Collection SEPSPU -- sep2018.01.081

Repository of Institute of Regional Research Repository of Vernadsky Library UDC 343.85:343.37; JEL E23, H26, O17
Vasyltsiv, T., & Porodko, O. (2018). Napryamy i zasoby detinizatsiyi ekonomiky na subrehional'nomu rivni [Directions and means of overcoming the shadow economy at the subregional level]. In Sotsial'no-ekonomichni problemy suchasnoho periodu Ukrayiny [Socio-Economic Problems of the Modern Period of Ukraine]: Vol. 129 (1) (pp. 81-85). Retrieved from [in Ukrainian].
Sources: 12


Vasyltsiv Taras Hryhorovych

Doctor of Economics, Professor

Acting Head of the Department of problems of social and humanitarian development of the regions of the Dolishniy Institute of Regional Research of NAS of Ukraine

Contacts:, (098)11-555-01, (063)854-01-50


Porodko Ostap Yuriyovych

Postgraduate of the Department of finance, credit and insurance of the Lviv University of Trade and Economics




The paper proves that the level of shadow economic activity at the subregional level, in particular in small towns of Ukraine, remains high. This is manifested, first of all, in concealing part of the proceeds from the sale of enterprises; opacity, corruption, bribery and tax evasion in the field of land relations; violations of current legislation in the use of state or communal property; the presence of a significant informal segment in the labor market. The key aspects of the shadow economic relations at the subregional level are identified as following: concealing of part of the proceeds from the sale of enterprises, in particular in the sphere of trade, including through the sale of products (provision of services) by individuals – business entities, the presence of untreatable so-called shuttle trade, opacity, corruption and bribery, tax evasion in the field of land relations, violations of current legislation in the area of utilization of economic resources and mineral resources, a significant informal segment in the labor market and employment in the shadow economy, the presence of the shadow sector in the field of tourism, the presence of the shadow sector in the field of currency exchange operations. The fact that shadow economic relations are a significant obstacle to the socioeconomic development of small towns and rural areas of Ukraine is proven, as it leads to a decrease in the volume of revenues to local budgets, significantly impedes the access of business entities to economic resources and creates obstacles to the development of entrepreneurial initiatives, deforms the development of the labor market and leads to an increase in official unemployment. Special attention is paid to the growing need to improve the means of state policy aimed at overcoming the shadow economy at the subregional level, and mostly of an economic nature, with a view to simultaneously stimulate the development of entrepreneurship. The following areas of shadow economy overcoming at the subregional level in Ukraine are identified: strengthening the control over the volume of activity of business entities that operate under preferential terms of taxation, reporting and accounting, reducing the amount of shuttle trade, strengthening of control over the use of land resources, implementation of programs for informing the population on the conditions for the establishment and conduct of business, simplification of conciliation and authorization procedures in the course of entrepreneurial activity, implementation of measures aimed at leveling the risks of labor market development in depressed territories, introduction of tax incentives for investment of funds into the economy of small towns.


shadow economy, small towns, rural territories, directions and means of state policy


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