What is the term used for the sector of the economy that is not monitored or taxed by the government?

The term that refers to the sector of the economy that is not monitored or taxed by the government is the informal economy. This sector encompasses a wide range of unregistered and unregulated economic activities that occur outside the formal system. Individuals and businesses participating in the informal economy may not adhere to government regulations, tax requirements, or labor laws, which often allows for more flexible work arrangements and lower costs.

This understanding aligns with the broader implications of the informal economy, such as its contributions to employment and economic activity, particularly in developing regions where formal job opportunities may be limited. Furthermore, the informal economy can provide valuable services and products, even though it lacks oversight from authorities, which differentiates it from other terms like the black market, shadow economy, and grey economy that may include illegal or partly legal activities.