Follow us
Back to Flash&Facts

The Shadow Economy does well

The fight against tax evasion is a key element of the current states communication strategy within and beyond Europe. It concerns tax fraud in general. And the authorities use harsh words. Surprisingly the policy response is much smoother when it comes to the particular issue of undeclared work. According to a recent study from the Institute of Economic Affairs, the shadow economy constitutes approximately 10% of the GDP in the UK, 14% in Nordic countries and about 25% in Spain, Portugal, Italy or Greece. And it has already affected Germany and even Switzerland. High taxes and labour laws which are sometimes too strict and too rigid are the main reasons for the expansion of the black economy. One should add that more and more legal workers don't earn decent wages. There are an estimated 2 billion people around the world who can be considered as workers "off the books". Although the statistics might be open to discussion what remains clear is that the informal economy is a disturbing phenomenon. This problem is even more serious in the emerging countries. But it seems that the shadow economy is often considered a normal and acceptable part of society. It is some sort of "social shock absorber". Yet this situation destabilizes seriously the public finances worldwide.

Post a comment

Please check that the information in the fields here below is correct.

Your comment is awaiting approval and will soon appear below!

Comments :

  • No comments


Stay Informed about the Latest News

Created by