• Austria's news in English

Shadow economy costs €454bn says economist

The Local · 25 Sep 2015, 11:36

Published: 25 Sep 2015 11:36 GMT+02:00

Facebook Twitter Google+ reddit

Speaking to the Financial Times, Professor Schneider from the Johannes Kepler University Linz, said that although measures could be taken to crack down on the shadow economy, it could not be completely dismantled.

“One could crack down 20 to 30 percent on shadow economy with clever policies but not more,” he said.

Tax losses of €454 billion would equate to 8.6 percent of total annual tax revenue, and national losses range from 33 percent of total revenue in Bulgaria to 4.4 percent in Austria.

Most of the losses are a result of undeclared work but about a third are thought to be from cash heavy businesses under-reporting their sales.

The figure is the latest of several estimates of tax losses due to shadow economies, a number that is hard to pin down due to the illicit nature of the transactions.

An earlier report released by Professor Schneider in January stated that the estimated EU tax losses from the shadow economy in 2009 was €864 billion.

In 2013, some experts estimated the losses could have exceeded €1 trillion. The EU economic commissioner Pierre Moscovici said earlier this month that EU member states should crack down on those who avoid paying VAT after a study suggested €168 billion was lost in 2013 this way.

Scandinavian countries, where cash payments have significantly fallen, are also less likely to see wages paid in cash in comparison with central and eastern European countries.

In comparison Britain has seen a rise in the number of notes in circulation, which authorities say is due in part to tax evaders holding back large amounts of cash that are then released into the economy.

For more news from Austria, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Verdict on swimming pool rape case overturned
The Theresienbad swimming pool in Vienna. Photo: Wikimedia

An Iraqi refugee who was jailed after claiming it was a sexual emergency when he raped a boy in a swimming pool has had the sentence overturned.

Vienna Comic Con promises to be 'bigger and more galactic'
Cosplay star Yaya Han. Copyright: Yaya Han/Bryan Humphrey

Comic Con returns to the Austrian capital on November 19th-20th at the Messe Wien.

Three refugees arrested on drugs charges
Cannabis plants. Photo: J. Patrick Bedell/Wikimedia

A gang of three Afghani drug dealers has been busted in Vienna.

Hungarian woman crushed by snowcat piste machine
Snowcat machine. Photo: Melensdad/Wikimedia

A young Hungarian woman has died after being crushed by a snowcat piste machine on the Dobratsch mountain in Carinthia.

Austrian policeman sentenced over 'Heil Hitler' salute
Photo: Flickr

A policeman in Austria was sentenced on Thursday for shouting "Heil Hitler" at a driver during a traffic check at the Hungarian border in April.

Scary clown craze endangers crucial work of clown 'doctors'
Photo: Bojan Tavcar

Within the last couple weeks, disturbing events involving masked individuals has caught public attention in Austria.

Chimney sweep rescues lost mushroom picker
Photo: James Lindsey/Wikimedia

A 76-year-old Austrian man who went out mushroom picking almost froze to death after getting lost and spending the night in the forest.

Refugees sold into forced prostitution
File photo: UNHCR

Female refugees are being sold into forced prostitution in Austria, a police investigation into human trafficking has found.

Driverless bus takes a spin around Salzburg's old town
The Arma driverless shuttle bus. Photo: Navya

A driverless minibus has made a test journey in the city of Salzburg.

No jail time for asylum seeker who dumped baby in road
Photo: Paul Gillingwater

A man who grabbed his own child and dumped her in the middle of a busy road has been given a nine-month suspended sentence.

Sponsored Article
How to vote absentee from abroad in the US elections
12 brilliant German words you won't find in English
Sponsored Article
Last chance to vote absentee in the US elections
Five films which will change your mind about Austrian cinema
Those surprising Austrians!
Sponsored Article
How to vote absentee from abroad in the US elections
100 years since the last emperor's death
Afghani family's new home in Austria
Der you learn Deutsch?
Delighted by the light
Beware these passport scams
Of course we skipped Oarsch
Foodies rejoice at the choice!
Travel & Tourism
10 years after her escape from captivity
Surviving the Brexit for British expats
Day 2 of the World Bodypainting Festival 2016
Is Islam hostile to Western society?
Bodypainting festival in southern Austria
Europe's ice cream capital
Best Austrian beauty spots
Travel & Tourism
Three days in Vienna as a tourist
How to make friends in Austria
jobs available