A/HRC/43/45/Add.1 employment, the figure is staggering: the International Labour Organization (ILO) estimates that 83.1 per cent of total employment is informal employment, which encompasses employers and own-account workers operating an informal enterprise, employees holding informal jobs and contributing family workers. 61 25. The informality of markets, encompassing both economic and labour markets, has significant implications on the protection of human rights. From a fiscal perspective, informality clearly implies lost tax revenue for the State. Many stakeholders, particularly those from the private sector, spoke of punitively high taxes on the formal sector and their inability to compete with virtually “tax-free” informal businesses, which creates disincentives for private investments. The informal economy also facilitates tax evasion, tax avoidance and money laundering, as there is no comprehensive oversight of taxable transactions. It also reportedly creates opportunities and avenues for tax evasion and money laundering by the formal sector. 26. The large degree of informality also means that the majority of workers are exposed to often precarious and temporary jobs without pensions, social or health insurance. According to an analysis based on the 2007 household survey, 70 per cent of workers are not covered by any social security. 62 While informal workers have an option to make voluntary contributions to the individual capitalization funds, they often do not exercise this option: only 1 per cent of informal workers do so. 63 Moreover, employment in the formal sector does not necessarily guarantee social security coverage, as 15 per cent of workers in the formal sector are reportedly without coverage due to their employers evading compulsory contributions.64 27. While there are a number of universal and conditional cash transfer programmes, they only benefit groups in vulnerable situations at certain points in their life cycle, such as older persons, children and mothers. The social protection system has a clear gap for working-age adults and lacks a whole life-cycle approach to ensure the social protection floor for all. Earlier this year, the Government launched the Universal Health System to provide health insurance to approximately 5 million people who had been previously without any health insurance coverage. However, it remains to be seen if this ambitious programme, at a cost of $400 million, will be effective in achieving its goal and fiscally sustainable in the long run. 28. Given how rooted informality is, there seems to be no adequate incentive to change the status quo. As highlighted by a variety of stakeholders, the universe of informality is far from homogeneous: there are various forms of informality, ranging from genuine family, community and cooperative relations to large business enterprises operating outside the contour of national laws and regulations. There are also wide differences among workers in informal employment, in terms of income level, status in employment, sector, type and size of enterprise, location of workplace and degree of social protection coverage. 65 While this diversity should be fully recognized and taken into account, it is critical that conscious and continuous efforts be made to facilitate the transition from the informal economy to the formal economy, based on full respect for the human rights of those operating in the informal economy. As acknowledged by ILO, the high incidence of the informal economy poses a major challenge for the rights of workers social protection, decent working conditions, inclusive development and the rule of law and has a negative impact on the development of sustainable enterprises, public revenues and Governments’ scope of 61 62 63 64 65 10 ILO, Women and Men in the Informal economy: A Statistical Picture, 3rd ed. (Geneva, 2018), appendix B. Javier Monterrey Arce, “Social protection systems in Latin America and the Caribbean: Plurinational State of Bolivia”, ECLAC, September 2013, pp. 16–17. Ibid. Ibid. See also Committee of Experts on the Application of Conventions and Recommendations, Observation (adopted 2009). Available at www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB: 13100:0::NO::P13100_COMMENT_ID:2321021. ILO, Women and Men in the Informal Economy, p. 1.