In the field of finance, a set of economic activities that are not declared and that get out of the hands of the bodies in charge of their control and therefore of the official figures are called underground economy. This type of economy goes beyond the limits of labor and tax legality, as well as social security, usually this is frequent in illicit activities or, failing that, in areas related to individual work, the first activities that appear in the The list of the black economy are those related to the sale of drugs and human trafficking, secondly are commercial transactions without paying taxes, as well as contraband merchandise in order to avoid taxes.
The proportions of an underground economy are practically impossible to calculate, since it is not under supervision, in addition to avoiding taxes and therefore will not have any official figures, but despite this statistical differences can give An indication of the proportion of this fact, that is to say that a nation's spending must coincide with its income, since in theory all commercial operations should be carried out with transparency. However, in an underground economy, expenses must exceed income, since as mentioned there is no data on income from illegal activities, however it is reflected in the expenses of a legal transaction.
Similarly, a sign that can indicate that you are in the presence of an underground economy is when the consumption of a service increases rapidly compared to GDP, which is an indicator that illegal activity is developing at the expense of the legal economics.
It is important to note that in the same way that occurs with the formal economy, these types of economies are not completely closed, since there are economies of a certain country that can contribute to the development of the underground economy of another state. Some of the measures that countries adopt to combat this type of activities are the legal penalty for non-compliance with the regulations related to taxes, as well as for the crime of bank fraud, eradication of tax havens and in extreme cases they may choose to eliminate cash transactions.
