Formas de convalidar la efi cacia del artículo 34 inciso a) de la LIR por encima de la sétima disposición complementaria fi nal del Decreto Su-

Non-observed economic activities in industry include:

• under-reporting of production by registered enterprises; • non-licensed production of goods and services;

• illegal production;

• production by unincorporated enterprises belonging to households; • irregular and individual activities.

With respect to officially accounted activities, the adjustments are made for all enterprises (large, medium, small, non-industrial organizations, individual entrepreneurship), as well as for volumes of output underreported by legal entities in order to evade taxes, compliance with legislation, etc. With respect to informal activities, the production of goods by the household sector is adjusted. Expert estimates of the production of selected goods are made by comparing indicators of production per capita for the given periods.

The volume of production in the informal sector is adjusted on the basis of the results of quarterly household surveys. Calculation of volumes (separately for urban and rural areas) are made according to the following formula:

Vhh = (Vbudget survey : n) : Famх Pop. where Vhh = volume of products produced in households; Vbudget survey = volume of production from budget survey; n = number of surveyed families;

Fam= average size of a family; Pop= number of resident population.

The balances of production and distribution of most important kinds of raw materials, industrial goods and consumer goods are compiled on the basis of data on production reported by industrial enterprises, consumption of raw materials, fuel and energy, reported data on trade, merchandise and combined markets, as well as the customs data. Statistical discrepancies in the supply-and-use of selected goods reveal the hidden production or hidden consumption.

3.2 Construction

The balancing method is used to determine the volumes of hidden and informal activities in construction. The volumes are determined as the difference between the use of resources and the data reported by enterprises.

Resources comprise construction and other materials used in construction and mounting and repair works. Estimated volume of hidden activities in construction (contract works) is determined on the basis of used resources according to the following formula:

Vcontracts=Vo×(1-d)

where

Vo = estimated volume of executed construction and repairs;

d= share of own-account construction works.

The volume of hidden and informal construction activities is determined as the difference between the estimated volume of contract work and the data reported for small enterprises.

The value of hidden and informal construction activities is distributed by region in proportion to the level of under-reporting of data by construction enterprises, and similar data reported by customers.

3.3 Agriculture

Output in agriculture is determined with combined methods, which implicitly include the estimates of non-observed economy. Output of crops is calculated on the basis of data on sowing areas, by type of crop and their average yield. Output of livestock products is calculated on the basis of the number of livestock and its average weight. The adjustments for informal activities concern the products produced on individual household plots. Hidden activities of enterprises are

162 KAZAKHSTAN

determined by the residual method; the volume of household output and the reported data of enterprises are excluded from the total volume of production.

3.4 Transport

Individual entrepreneurs provide almost all transport services in Kazakhstan. The rent of transport vehicles by them from transport enterprises is also included. Therefore, it is not possible to collect objective information directly from individual entrepreneurs and calculations are made indirectly. The basis for the calculations are data of the State Automobile Inspection on the number of lorries, buses, and taxis owned or rented by citizens. Also data on average mileage, load and profitability of cargo transportation are used. Calculations of passenger transportation by taxis are made in the same way on the basis of the data on issued licenses.

3.5 Trade

Estimation of non-observed trade includes adjustments for retail turnover. First, adjustment for non-response is made. To this end, the volume of retail turnover of all types of enterprises for which retail trade is the main or secondary activity is determined on the basis of data from regular statistical observations. The turnover per enterprise is calculated and extrapolated to those enterprises that have not submitted their reports. Data of the sample survey of trade at the markets and by individual entrepreneurs are added to the received value. The turnover calculated in this way is compared with the data from the survey of population expenditure on food and non-food products. This enables to determine the concealed volumes of sales of goods by enterprises.

3.6 Market services

The volume of hidden and informal market services provided to the population is determined mainly by indirect methods.

The size of under-reporting is estimated by comparing the volumes of services and sales of enterprises with similar staff and service profiles. The results of statistical bodies’ checks on primary bookkeeping documents are also used. The actual volume of market services provided and adjustment coefficients for each kind of service, are determined on the basis of the data reported by enterprises on the volume of market services provided and the sum of revealed unrecorded earnings. Concealed volume is then determined by extrapolating the adjustment coefficient to the overall volume of market services provided by all enterprises which presented their reports to the statistical office. Primary criteria for determining the volume of market services provided in the informal sector are:

• the number of individual entrepreneurs engaged in providing market services; • their labour productivity (volume of services per entrepreneur).

The average volume of market services provided by small enterprises per worker is taken as an indicator of the labour productivity of entrepreneurs. This is applied to the number of individual entrepreneurs and the volume of services provided by them is determined.

An additional method for calculating the volume of services provided by individual entrepreneurs is based on households’ statistical observation data, which help to calculate the average number of individual entrepreneurs in each area of the consumer services market. Data on the annual average number of individuals providing market services, grossed up to the total

population, must be compared with the data of tax office on the number of officially registered individual entrepreneurs. If, for certain types of activity, the data of tax offices exceed the figures received from household surveys, the tax data are used.