High corruption rates are reflected in the practice of paying tables
Corruption is one of the obstacles to growth in most world economies. Governments lose billions of dollars every year due to corrupt deals and payments. According to Transparency International, corruption is particularly prevalent in emerging economies in Africa and Asia. One of the common forms of corruption used by both civil servants and business people is the salary under the table. Payments by civil servants for access to civil services can be seen below the table. In most cases, there is no official confirmation showing the payment because the payment ends up in the person’s pocket.
Factors contributing to the payment below the table
Although there are laws regulating public finances and payment for public services, some civil servants and companies still participate in the desktop payment for services offered by the government. Nearly 32.1% of companies in East Asia and the Pacific made payments to civil servants to do something, while 25.5% of their counterparts in South Asia also unofficially paid civil servants for similar services. In sub-Saharan Africa, 23.9% of companies also acquired the services of public servants through illegal payments. These illegal payments are mostly made to expedite the process, such as payments. B. registration process, permit processing, tax exemption and other government requirements. Other companies that face non-compliance fees also pay payments to avoid paying high fees and charges. Under the table, wages thrive in these countries due to a weak legal system and a framework also run by corrupt officials. In East Asia and the Pacific, the relevant authorities have not enacted current laws to make this illegal payment flourish.
Effects of informal payments
Below the table, payments have significantly reduced government revenues in most countries. The income of the company does not correspond to the number of registered companies. So the government spends a lot on managing the business environment, but gets little. There are over 500,000 registered companies in South Asia, but less than 70 of these companies make proper payments to the government. In sub-Saharan Africa, most civil servants earn almost five times more than official salaries. Under the table, payments have also led to the creation of illegal businesses and companies that do not adhere to the country’s business rules. There is also a high risk that the state will develop a black market for illegal goods. Most companies in these countries cannot be managed transparently due to illegal payments. Such payments to employees therefore undermine business ethics.
Under the table, payments to public servants have also led to a “mafia” and a network of officials overseeing business in the country. Those who do not make such payments are subject to stricter and biased regulations. The corruption index remains high in these countries, while foreign investors are discouraged from investing in those countries.
Below the table Payments to civil servants – global distribution
|rank||region||Percentage of companies that pay employees under the table to “get things done”|
|1||East Asia and the Pacific||32.1%|
|Fourth||The Maghreb and the Arab world||18.4%|
|5||Eastern Europe and Central Asia||17.2%|
|7.||Central Europe and the Baltic States||14.5%|