/ world today news/ The European Union loses 454 billion euros annually due to the gray economy, or 8.6% of all tax revenues. This indicator varies from 4.5% in Austria to 18.8% in Bulgaria.
Almost a third of the losses are related to the underreporting of companies with a lot of money, and the rest – to the payment of undeclared labor.
Earlier in September, the European Commission published a report, according to which the EU countries in 2013 could not improve the situation with the collection of taxes and from the Value Added Tax alone they failed to receive 168 billion euros. For this reason, the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, called for a fight against tax evasion. “It remains a vexing problem,” he said.
In developing countries, the scale of the gray economy is even greater and in some of them it accounts for half of the jobs in the non-agricultural sector, the Organization for Economic Cooperation and Development /OECD/ claims. The International Monetary Fund blames this on corruption and over-regulation, but notes that the shadow economy can contribute to future economic growth.
The economic crisis has given a significant boost to the fight against the shadow economy, says Andreas Pratz, a partner at the consulting company AT Kearney. Various countries have taken hundreds of measures against undeclared labor in recent years. But their success largely depends not only on the use of the stick, but also on the carrot. For example, in Belgium there is a successful scheme in which subsidies are given for the employment of people working in the homes. Another popular measure is drawing various types of lotteries to pay taxes. This applies in Portugal, Brazil, Argentina, Colombia and even Slovakia.
Restrictions on cash transactions are becoming more common. At the same time, countries with low penetration of bank cards can encourage their use. Colombia and Argentina reduced VAT on purchases made using credit cards. The most noticeable is the decrease in cash transactions in the countries of Northern Europe, where they have shrunk by 20%. In many countries, the use of banknotes is growing rapidly, the Bank of England explains this by their accumulation by people who do not pay their taxes. “The stock is unlikely to disappear in the near future,” the bank concluded.
Governments can profit greatly by forcing people and companies to come forward, but they have no chance of completely eradicating tax evasion.
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Vanessa Holder, Financial Times.
London / Great Britain
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