The Soviet Union has declared an all-out war against "unearned income," but it is having trouble defining the enemy.

In its simplest, most straightforward sense, "unearned income" here means illegal income -- from bribery, speculation, extortion and other economic crimes that are the main focus of a tough new decree due to go into effect July 1.

But unearned income also has other meanings, vague and ill-defined, which have come to signify forms of private enterprise -- "individual work," ranging from repair jobs to interior decorating to giving people rides in a vehicle for money.

A recent article in Sovyetskaya Industriya estimated that up to 20 million people in the Soviet Union are engaged in "individual work" -- in other words, likely receiving "unearned income."

This is the gray area of Soviet law and economics that many had hoped the new leadership under Mikhail Gorbachev would elucidate, define, and in some cases, perhaps, legalize.

Before the 27th congress of the Soviet Communist Party in February, articles appeared in the press advocating limited private enterprise -- for instance, allowing car owners to charge for rides, or small artisans to repair shoes or decorate apartments, mostly activities known in the United States as moonlighting.

Given communist ideology, such trespassing into the realm of private profit is complicated. But as many experts have pointed out, legalization of such activities would simply be acceptance of existing reality.

It would also allow the state to profit through taxation and regulate excesses through new laws.

But instead of new laws broadening the scope of private enterprise, the first statutes to go on the books are designed to control and penalize "private" incomes.

"They are starting with the controls. What follows is not clear," said one western expert on Soviet economics. Or, as a Soviet citizen put it, "First they tell us what is forbidden, before they tell us what is to be allowed."

In an interview in the government newspaper Izvestia, Soviet Chief Prosecutor Alexander Rekunkov stressed that a law on private enterprise was now in the process of being developed. "The point," he said, "is not to forbid individual private work but, on the contrary, to develop it."

But despite these promises, there is confusion here over the timing and meaning of the new decree against "unearned income" and the accompanying campaign in the press.

The principal target of the new decree, put out last month by the Communist Party and adopted last week by the Supreme Soviet, is criminal activity, particularly anything involving misuse of government property or position. A driver of a government car who uses it for personal gain is liable for criminal sanctions -- two years in prison, or fines from $390 to $1,300.

Government officials with fancy dachas, or country houses -- one of the most conspicuous manifestations of wealth in this country -- may be asked to show how they paid for them, which already has prompted some to give theirs back to the government in the last few weeks, according to reports circulating here.

The new decree also provides for new charges against criminal mismanagement of government property -- charges that could apply to misuse or neglect of equipment.

Bribe takers and extortionists, particularly high-level officials in government and party, are put on notice: the higher the rank, the greater the sum of the bribe, the stiffer the penalty under the new decree.

The new toughness was apparent recently when the Kremlin formally annulled honors commemorating the late Sharaf Rashidov, a former leader of the Uzbek Republic and close friend of the late president Leonid Brezhnev, who was guilty of inflicting "tangible moral and material damage" on his republic.

For average citizens, there are new regulations aimed at tracking and controlling excessive income, often synonymous here with "unearned," considering that the average salary is $247 a month. As of July 1, if a Soviet citizen buys something worth more than $13,000, he or she must show where the money came from. Purchases of more than $6,500 cannot be conducted in cash, only through "checks" drawn on savings accounts.

In addition, a new tax is being proposed for income earned outside a person's main job. So far, however, many of these new regulations are still unclear. As another article in Izvestia pointed out recently, the "control mechanism" is being "perfected."

In the past weeks, newspapers, experts and citizens have been debating the key question: When is income "earned" and when is it "unearned?"

Prosecutor Rekunkov tried to define the difference: When a person with a private plot of land grows cucumbers and sells them for profit at the market, that is "earned" income.

But, he said, if the person who sells cucumbers for profit does not have another job -- or has one only "for appearance's sake," then the income from the cucumbers is "inadmissible."

There are other dilemmas connected with the question of unearned income, best expressed by a recent query printed in the newspaper Leninskoe Znamya. A reader who needed work done on his dacha was warned by an official of the appropriate government building concern not to apply to private contractors, known as shabashniki, whose work falls in the gray area.

Unfortunately, the official added, his agency would not be able to help with the reader's problem at the moment, because it did not have sufficient materials or workers.

The new decree recognizes the shortages -- and the desperation of ordinary citizens -- by promising an "expanded production of the consumer goods in high demand." It adds that "appropariate authorities have been asked to better study why a scarcity of particular goods and services arises and to get this phenomenon eliminated."

The new decree has also worried some Soviet citizens because it presents an ideal opportunity for envious neighbors and disappointed friends to denounce someone for "not living on their means."

Prosecutor Rekunkov addressed this in his interview, stressing that a struggle against anonymous slander is under way, concurrent with the struggle against "unearned income."