Vietnam's shadow economy measurement scheme to be proposed in Q1

Monday, 2018-02-26 17:36:07
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Deputy Minister of Planning and Investment, Nguyen The Phuong
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NDO/VNA – The Ministry of Planning and Investment has been tasked with compiling a project to measure Vietnam’s non-observed economy (NOE), for submission to the Government in the first quarter of 2018, according to Deputy Minister of Planning and Investment Nguyen The Phuong.

The Ministry of Planning and Investment has been seeking advice from relevant ministries and agencies on the statistical scheme, with one of the key issues being a specific definition of the unobserved economy that consists of five elements.

The first element comprises underground economic activities that are legal but deliberately concealed from the public authorities in order to evade the payment of taxes and social security contributions; or avoid compliance with certain legal standards, such as the minimum wage, maximum working hours, and safety or health standards, or with administrative procedures, such as completing statistical reports.

The second comprises illegal economic activities that generate goods and services forbidden by law, for example, drug trafficking, prostitution, and human trafficking. Legal economic activities carried out by unauthorised producers also belong to this category.

The third is the informal sector, including the productive activities conducted by households with the main objective being to generate employment and income for the people involved. Such production operates on a small scale, at a low level of organization, and is generally based on casual employment, kinship, or personal and social relations, and not on contractual agreements.

The fourth element encompasses household production for self-consumption, including productive activities that result in goods or services consumed or accumulated by the households producing them, for instance, producing crops and livestock, weaving cloth, and building one’s own house.

The last area comprises the economic activities that are missed out by data collection programmes due to problems arising either from statistical coverage or statistical errors.