The shadow system, aka, underground economy is when people do not have a regular job and get paid under the table, meaning they do not pay tax and have no income reported. For example, a drug dealer has no reported income because it's illegal. They don't pay tax because it's "secretive" if you will.
This can be beneficial because that person being paid under the table or part o the underground economy is receiving money and spending it. Also it helps the person financially, if they cant find a "real" job, it provides them with a living in which they receive money. However, there are some consequences of the shadow system.
The government depends on taxes for spending. The less money spent on taxes, the less money the government has to spend, making their job a lot harder financially.
In conclusion, the shadow system or underground economy can be both beneficial and unfavorable.
