This research project is the assessment of shadow economy (SE) in an urban public passenger vehicle transport (UPPVT) of Yerevan and development of measures on its reduction. For realization of this task, the following hypotheses are carried out:.
• Economic basis of SE emergence in UPPVT;.
• Formation sources of a shadow circulation in UPPVT;.
• Economic assessment of a shadow circulation in UPPVT;.
• Methodology of SE research in UPPVT;.
• Development of organizational, normative and legislative measures on reduction and further liquidation of shadow.
circulation in UPPVT.
The economic preconditions of emergence and development of SE in UPPVT are the following: sudden economic and political changes in the country in the beginning and middle 90ths of the last century, unprepared transition of the country to market economy, political and social instability, unemployment, high tax rates, the atmosphere of impunity, the progress of corruption in high echelons of authority, the absence of corresponding economic legislation.
It is known that even in the developed countries of the world public transport is unprofitable sphere - from 20 up to 90 % of its maintenance expenses are covered from the local and federal budgets [14,20]. Contrary to economic laws which function all over the world, in Armenia UPPVT does not only receive the subsidies from the state, but also has turned in to profitable sphere. The preliminary researches, which were carried out has shown, that SE is evident fact in UPPVT, caused by ticketless system of payment for a journey, overtime work of the drivers, transportation of above permitted standard of passengers etc. From their daily earnings the drivers provide (15000-18000 drams; 470 drams = 1 US Dollar): the fixed tax (2400-2800 drams depending on the mark and capacity of the vehicle); "tax" to the operator of the given routing line (4000-5000 dram); payment for fuel (2500-3000 dram); all operational expenses of the vehicle including the current and capital repairs (about 1000 dram); his own salary (5000-6000 dram), as they actually do not receive the salary from their auto organizations.