The informal economy comprises up to 50% of the national economy in Kyrgyzstan, while official estimates vary from 23 to 25% of the GDP. The trade, construction, transport, and processing industries provide a significant role in forming informality. Labour market informality covers 71.8% of all jobs in the country, mostly in the sphere of microbusinesses and self-employment, while formal employment is stagnating. Tax and social security systems make it possible to gain from a lowered tax and social payments for certain types of microbusinesses and self-employed people when compared to formal business entities. Distortion of economic operations in the country creates incentives for high informality in the economy and consequently in the labour market.