## Joint Task Team on Informal Economy: Terms of Reference

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**Canonical URL:** [Joint Task Team on Informal Economy: Terms of Reference](https://www.imf.org/-/media/files/data/statistics/bpm6/iett/iett.pdf)

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### Introduction: scope and rationale
- Two complementary objectives:
  - Ensure all activities, including those described as “hidden” or “underground,” are encompassed in measures of total activity.
  - Define and measure the subset of economic units considered “informal” and assess their firm dynamics and contribution to jobs and income in agriculture, rural, and non-agriculture sectors.
- The informal economy broadly comprises:
  - Informal sector production activities and informal employment as defined by ILO resolutions and guidelines from the 15th and 17th International Conference of Labour Statisticians (ICLS).
  - Activities described as “illegal,” “hidden,” or “underground,” which may overlap with but are conceptually distinct from informal sector productive activities.
- The informal economy includes relevant cross-border transactions of resident units and requires coherent treatment for national accounts and balance of payments.
- Existing related guidance and manuals cited as background:
  - Measuring the Non-Observed Economy (Handbook, 2002).
  - Eurostat Handbook on Compilation of Illegal Economic Activities in National Accounts and Balance of Payments, 2018 edition.
  - ILO and Delhi group handbook Measuring informality: A statistical manual on the informal sector and informal employment.
- Drivers for updated guidance:
  - Integration of informal sector and informal employment into the System of National Accounts 2008 (2008 SNA).
  - Emerging informal activities enabled by digital technologies and the gig economy.
  - Need for exhaustive estimates for GDP, supply and use tables, contribution of informal economy activities to GDP, firm growth and productivity, labour market dynamics, and distributional analyses.
  - Omissions in trade statistics from informal cross-border transactions affecting current account, financial account, and international investment positions.
- Institutional context and recent initiatives:
  - UNODC and UNCTAD programme to develop methods to measure inward and outward illicit financial flows.
  - IMF BOPCOM Task Force on the Informal Economy (TFIE) stocktaking of country practices and a web platform covering metadata of 24 economies and almost 57 compilation practices.
  - ILO working group on revising standards for statistics on informality in preparation for the 21st ICLS in 2023.
  - The 7th IMF Statistical Forum concluded there is a need for a coherent macroeconomic statistics framework for informal economy cross-border transactions.
- Importance of statistics on informal employment:
  - Fundamental for understanding labour market size, structure, dynamics, labour underutilization, and worker risk/vulnerability profiles when complemented with informality dimension.

### Mandate and operations of the IETT
- Mandate:
  - Establish a joint informal economy task team (IETT) to prepare guidance notes for a coherent set of statistical standards that define concepts necessary for measuring work and economic activity, including cross-border transactions, in the informal economy.
  - Guidance to be based on country practices and to contribute to global coverage and harmonization across the 2008 SNA, BPM6, and the ILO standards revision.
  - Outcomes to feed into updates of 2008 SNA and BPM6 and ILO’s revision of standards on informality.
- Timeline and scope:
  - The BPM6 and 2008 SNA update processes have a five-year timeline—split into two phases—ending in March 2025.
  - The IETT’s mandate spans mostly Phase I of the update process—March 2020 to March 2022.
  - The IETT may be consulted during Phase II on an as-needed basis.
  - The IETT will not consider new issues after June 2022 to accommodate review and consultation before finalization by end-2024.
- Composition and secretariat:
  - Co-chaired by the IMF and a country chair (selected by the ISWGNA).
  - IMF and UNSD will provide the secretariat.
  - Membership to include representatives from the UN Committee on national accounts (AEG and ISWGNA), BOPCOM, ILO Working Group, UN Committee on Business and Trade Statistics, possibly FAO Committee on agriculture and rural statistics, and compilers/users of international and national accounts, business, trade and labour statistics.
  - Selection criteria include depth of expertise and geographical balance. Members work on a voluntary basis.
- Communication and working arrangements:
  - Working language: English (no translation or interpretation).
  - Primarily electronic work, with potential one or more physical meetings by co-chairs to reach conclusions.
  - IMF to facilitate virtual meetings, document flow and management, and host a dedicated webpage for TORs, issues, and guidance notes.
- Overall coordination:
  - UNSD (on behalf of SNA community) and IMF (on behalf of BPM community) responsible for overall coordination between IETT and other task teams updating 2008 SNA and BPM6 to avoid duplication and align work plans.

### Guidance Notes: topics, format, and procedures
- Two primary areas of detailed investigation to be documented as Guidance Notes:
  - The statistical concepts on informality (informal sector, employment in the informal sector, and informal employment).
  - A macroeconomic statistics framework for measuring informal cross-border transactions.
- Guidance Note structure (standard format described in Annex I):
  - SECTION I: THE ISSUE (Background; Issues for Discussion; Supplementary Information).
  - SECTION II: OUTCOMES (Recommendation to revise or not to revise; Rejected alternatives; Changes required to current statistical standards; Annexes with chapters/paragraphs to update where relevant).
  - Background limited to not exceeding two pages; Issues for Discussion not exceeding two pages (excluding annexes); Outcomes not exceeding two pages.
- Working procedures:
  - IETT will strive for consensus on outcomes; minority dissenting opinions will be documented in Guidance Notes.
  - Key documentation for each item/concept will be a Guidance Note comprising two sections: issue and recommendations.
  - Guidance Notes will be discussed by written consultations or videoconferencing.
- Review and reporting:
  - Guidance Notes drafted by the joint TT; draft GNs reviewed by BPTT/Committee consisting of ISWGNA and AEG/ILO working group; posted for public consultation, experimentation and testing; finalized by TT considering public comments.
  - If significant changes occur after public consultation, a second round review occurs.
  - The IETT will submit periodic reports, via co-chairs, to the UN Committee on national accounts (AEG and ISWGNA), BOPCOM, and the ILO Working Group and other participating Committees.
  - Progress reports to the annual meetings of the UN Committee on national accounts (AEG and ISWGNA) and BOPCOM usually in October; inputs to the UN Committee on national accounts report to the United Nations Statistical Commission’s Meeting usually in March.
  - Reporting to these bodies will include outcomes and recommendations from Guidance Notes.

### Governance, approval process, and dispute handling
- Endorsement and final adoption:
  - Draft GNs sent to Committee consisting of ISWGNA/AEG, BPTT, ILO and other participating Committees.
  - Public consultation and testing stage follows posting for comments and experimentation.
  - Finalization and second-round review if changes are significant.
  - Agreement and endorsement of TT recommendations reside with BOPCOM, Committee consisting of AEG and ISWGNA, and ILO working group (using respective procedures).
  - Final adoption of recommendations resides with:
    - BOPCOM on the BPM6 update;
    - UNSC on the 2008 SNA update; and
    - 20th ICLS on the updated standards on informality.
  - Other manuals (to be determined) will have decisions by other Committees.
- Handling divergent views:
  - If divergent views emerge, an arbitration mechanism is to be set up and agreed.
  - Consideration may be given to retaining the status quo (i.e., no change) and placing the issue on a future research agenda.
  - If the decision is to change/update, guidance is to be incorporated in updated BPM, SNA, and ICLS resolutions and the issue closed.

### Key dates and numerical references
- Five-year update timeline for BPM6 and 2008 SNA: ending in March 2025.
- IETT Phase I mandate period: March 2020 to March 2022.
- Cut-off for new issues: June 2022.
- Reporting cadence: progress reports usually in October (annual meetings) and inputs to UN Statistical Commission’s Meeting usually in March.
- Updated: September 3, 2020.
- International Conference of Labour Statisticians references: 15th ICLS; 17th ICLS; 20th ICLS; 21st ICLS in 2023.
- IMF Statistical Forum referenced: 7th IMF Statistical Forum.
- ILO Working Group and UN Statistical Commission session references: 51st session (Statistical Commission call for practical guidance).

### Annex I — Standard framework for Guidance Notes (summary)
- Title/name of topic.
- SECTION I: THE ISSUE
  - Background (not exceeding two pages):
    - Problem statement and quantitative size of the issue if known.
    - Current international standards for treatment, including specific manual references and paragraph/page numbers.
    - Concerns/shortcomings of current treatment.
  - Issues for Discussion (not exceeding two pages, excluding annexes):
    - Possible alternative treatments/options (distinguish those requiring change in core framework vs. outside the framework).
    - Questions/points for discussion.
  - Supplementary Information (annexes).
- SECTION II: OUTCOMES (not exceeding two pages):
  - Recommendation: either (a) to revise (describe proposed revision, rationale, and practical feasibility) or (b) not to revise (arguments supporting position).
  - Rejected alternatives with reasons.
  - Identify changes required to current statistical standards.
  - If relevant, annex identifying all chapters/paragraphs needing update with suggested text.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/iett/iett.pdf_