Currently, labour informality reaches 76% of workers. Reducing it would provide considerable raises in tax collection and would grant Nicaraguan citizens basic rights.  

The Nicaraguan Foundation for Economic and Social Development (Funides) suggests improving tax collection by lowering labour informality.

According to the report “Tax Policy in Nicaragua”, the informal market is a serious restriction that affects the economy and tax policies. The average size of the informal market during 2005-2013 was 78.8%, considering the amount of working people who are not protected by Social Security.

The lack of employment in Nicaragua has led to a massive migration of Nicaraguans towards the United States, Costa Rica, Panama and Spain. “Even though family remittances play a major role in lowering the effects of poverty and inequality, informality increases the poverty cycle, generating pressure to improve and increase social expenditure” states the report.

Re-building the Nicaraguan labour market and starting by establishing basic labour rights clearly is an economic and moral imperative.