The paper Undeclared work in an enlarged Union shows that Britain is much more honest, with only 2% of its GDP being concealed from the tax authorities, second only to Austria (1.5%). Other upright countries were the Netherlands (also 2%), Sweden (3%), Belgium (3-4%) and Cyprus (4.2%), the same as Finland.
At the other end of the scale were, Hungary (18%), Lithuania (15-19%), Italy (16-17%) and Latvia (18%). Figures for Spain were not available.
Said the commission: ‘Undeclared work is the result of a combination of different, complex factors…including labour market rigidity, the tax burden and lack of trust in the effectiveness of government. Cultural traditions are also important. Southern European countries such as Italy and Greece have a sizeable proportion of undeclared work and Poland (14%), Hungary and Slovenia (17%) have traditional, deeply-rooted informal economies.
In terms of sectors, the construction industry was ‘the sector with the highest incidence of informal work’, except in Germany, where farmers and gardeners were more prone to hiding their income, (fuelled by high illegal immigration).
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