Staff Reporter
NEARLY a fifth of Spain’s economy operates ‘in the shadows’.
The submerged black economy is the third highest in the industrialised world, sitting at 17.2%.
The shocking research puts only Greece at 21.5% and Italy at 19.8% higher, according to Germany’s Institute for Applied Economic Research (IAW).
For the UK, in contrast, the figure plummets to 9.4%, coming in eighth.
Calculated as the total value of transactions that occur ‘off the books’ – i.e. work done for cash to avoid paying tax.
It ranges from paying a tradesman or a babysitter, to the illegal wildlife trade, counterfeiting and money laundering.
Untaxed and unrecorded economic activity boomed during the global financial crisis and continues to grow.
The global shadow economy is thought to be worth at least €550 billion.
While this is revenue that governments lose out on in terms of tax, it has also been argued that attempting to curb the black economy can limit growth and hamper innovation.
