So that's why you have lots of business which would not necessarily be legitimate. It consists of such things as traffic policemen stopping drivers for imaginary misdeeds and taking bribe in order to waive an official fine. Or it can involve a bureaucrat demanding a bribe to issue a license for a business to be registered or to import goods. Sometimes, too, low-paid teachers or doctors demand unofficial payments for good examination results or medical treatment. The complex, frequently contradictory laws on taxes in many post-communist nations leave ample room for negotiating an agreement where the state gets some tax money, the tax inspector lines his pockets and the businessman is not bankrupted by a crippling tax demand.
Tax fraud is usually the most important way that a government is cheated of money.
It is difficult to believe that no Russian official spotted the ruse. Gelin notes that, as long as those who are supposed to enforce the laws are poorly paid, corruption will flourish. The tax inspector, like the traffic policeman, and the low-level bureaucrat, is expected to pass a share of his earnings on to his boss. So it actually is in the interest of state officials to retain the status quo and resist reforms. Sometimes, more regulations provide more scope for demanding bribes.