30 March 1998
Brussels crackdown on black economy

THE European Commission (EC) is planning to crack down on Europes black economy where an estimated 28 million people have failed to declare jobs to tax authorities.

Officials believe undeclared work is concentrated in labour-intensive sectors with low profits such as agriculture, construction, retail and catering.

An EC paper, seen by the Financial Times, suggests strengthening penalties against people working in the black economy and reducing the advantage of failing to declare work.

Options range from highlighting the “unsociable behaviour” associated with undeclared work to decreasing tax on income from labour.

The member states with the largest amount of undeclared work include Greece (up to 35%), Italy (26%) and Belgium (21%). Britains is estimated at between 7% to 13% of gross domestic product.

  • Financial Times 30/03/98 page 20
  • The Guardian 30/03/98 page 16