EUROSTAT Tabular Approach to exhaustiveness

1
EUROSTAT Tabular Approach to exhaustiveness

• In Montenegro

2
N1-type of non-exhaustiveness

• This covers producers engaged in legal activities
  but deliberately not registering as a legal
  entity to avoid taxes, social security
  obligations, health and safety regulations, etc.
• This type of non-exhaustiveness is identified
  with NACE H - Hotels and restaurants.

3

• According to LFS, about 36 of the total number
  of persons employed was engaged in unregistered
  economic activities.
• The number of guest accommodated is an undercount
  in private sector and the gross output of hotels
  and their value added are underestimated.
• On these bases the experts estimate was made.

4

• MONSTAT increased its original estimate of value
  added by hotels and restaurants in 2002 by around
  11 per cent.

5
N3-type of non-exhaustiveness

• This covers producers not required to register as
  a legal entity because they have no market output
  or their market output is below the level at
  which they are expected to register.
• In Montenegro this type of non-exhaustiveness is
  identified with NACE A - Agriculture, hunting and
  forestry, NACE F - Construction, and NACE K -
  Real estate, renting and business activities.

6

• Agriculture, hunting and forestry
• A large number of households produce
  agricultural products for their own consumption.
• One part of their products they sell either
  from their home or in the open market. Sales are
  not registered and all the sales income goes to
  the sellers private budget.

7

• Construction
• As a general rule, workers hired to build
  private houses are not registered.
• Real estate, renting and business activities
• Many owners renting dwellings or business
  premises are not registered and do not report
  their incomes from renting to the Tax Authorities
  

8

• MONSTAT adjusted upwards its original estimates
  of value added in 2002 by 18 per cent for
  agriculture, hunting and forestry, 5 per cent for
  construction, and 5 per cent for real estate,
  renting and business activities.

9
N5-type of non-exhaustiveness

• This covers producers that are registered but not
  surveyed.
• In Montenegro, N5 is the principal type which
  refers to unincorporated enterprises and
  entrepreneurs.
• This type of non-exhaustiveness is identified
  with NACE A - Agriculture, hunting and forestry.

10

• MONSTAT increased its initial estimates of value
  added in agriculture, hunting and forestry (NACE
  A) for 2002 by 3 per cent.

11
N6-type of non-exhaustiveness

• This covers producers that are surveyed but who
  deliberately misreport their intermediate
  consumption or their gross output or both in
  order to avoid taxes and social security
  contributions.
• In Montenegro this type of non-exhaustiveness is
  identified with Manufacturing (NACE D),
  Construction (NACE F),

12

• Wholesale and retail trade, repair of motor
  vehicles, motorcycles and personal and households
  goods (NACE G), Hotels and restaurants (NACE H),
  Transport, storage and communication (NACE I),
  Education (NACE M) and Health and social work
  (NACE N).

13

• MONSTAT increased its initial estimates of value
  added for 2002 in NACE D by 2 , in NACE F by 18
  , in NACE G by 31 , in NACE H by 4 , in NACE I
  by 8 , in NACE M by 5 and in NACE N by 8 .

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Summary of results

• As a result of non-exhaustiveness adjustments,
  value added over all economic activities
  (including FISIM) was increased by 9.7 per cent
  in 2002.
• N6-type of non-exhaustiveness is predominated.
• The estimate of non-exhaustiveness in MONSTAT is
  a new task and needs further refinement.

15

• Improving the exhaustiveness of GDP estimates
  also requires the co-operation and involvement of
  those other ministries and departments whose data
  are used in GDP compilation. MONSTAT therefore
  intends to establish an intra-government group on
  the non-observed economy that will include
  experts from these ministries and departments.

16
Plan for future work

• To make a revision of the estimates as soon as
  the time series will be available (at least five
  years).
• The non-exhaustiveness adjustments that are
  defined in line with the classification
  non-exhaustiveness types followed by Eurostat in
  its tabular approach to non-exhaustiveness are
  included in the GDP estimates.