Survey: state loses a hundred million to grey economy 15.06.2012, 13:57
According to a survey of the Estonian grey or shadow economy made by the Estonian institute of economic affairs, the state is losing considerable amount as consumers say that about 8 percent of their total spending on goods and services is obtained from the black market.
Although the survey showed that the share of unreported salaries and consumption of illegal goods and services has been declining, only about half of the respondents (52 percent) said that they prefer to buy official goods.
13 percent of respondents said tht they prefer to buy goods from the illegal market while 35 percent said that buy illegal goods randomly.
The most popular illegal goods are pirated movies and downloading or copying of music CDs and music files (32 percent) and tobacco products (31 percent).
28 percent of respondents said that they buy repair services from the illegal market while 21 percent said that they buy sowing services from the illegal market.
18 percent said they buy firewood from illegal sources, while 14 percent said they use illegal car repair services and 11 percent said they buy illegal fuel.
8 percent of employees said that they earned unreported salaries in 2011. A year earlier the figure was 13 percent.
Most frequently, unreported pay was paid in construction and in the transport sector.
77 percent of employees do not support payment of envelope pay, mainly because of lack of social guarantees.
Marje Josing, head of the Estonian Institute of Economic Reserach, said that 27 percent of people who admitted receiving unreported pay were not satisfied with the situation. Of them, 69 percent said that they fear to lose their job if they claimed an official salary.
It is estimated that the state lost about 5 percnt of its social tax and individual tax intake or about 100 million euros.
Tõnis Kuuse from the tax authority said commenting the results of the survey: „Because of the shadow economy, the state is losing 40 million euros in the construction sector alone.”
Kuuse added that on the positive side, the fight against illegal cigarettes and alcohol has been successful.
„19% of smokers admit that it has become more difficult to buy illegal cigarettes while half of people who consume illegal alcohol say that they no longer can obtain it from official stores. This shows that we are moving in the right direction.”