As we mentioned before, underground economy has many definitions. But no matter what we define it,
it’s obvious that underground economy is a very important phenomenon. First it’s impossible to us to see
the big picture of the economy. Secondly, tax evasion causes significant financial losses. However it’s
impossible to say that, underground economy is completely pernicious. It has some positive effects on
economy such as; social balancing and providing economic activity. Anyway, one must not dismiss from
his/her mind that; though underground economy sustains cost reduction or competitive power, it has
negative effects such as levying more tax from the very same elaborates. Needless to say, struggling with
underground economy is the most important job of the government. But some steps to be taken first: