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The shadow economy is growing: high prices and the energy crisis are driving undeclared work - financial expert
More and more money is being made illegally in Germany. According to a report in “Welt am Sonntag”, the extent of undeclared work will increase by around 80 billion euros compared to the previous year to a total of 463 billion euros. This illegal income also has an impact on the gross domestic product (GDP). The financial scientist Friedrich Schneider estimates that taxes and social security contributions amounting to 2.4 billion euros will be lost as a result. Schneider has been calculating the volume of undeclared work for a long time. Due to high prices and the effects of the energy crisis, the economist has revised the figures for the current year upwards by 20 billion euros. Beginning …
The shadow economy is growing: high prices and the energy crisis are driving undeclared work - financial expert
More and more money is being made illegally in Germany. According to a report in “Welt am Sonntag”, the extent of undeclared work will increase by around 80 billion euros compared to the previous year to a total of 463 billion euros. This illegal income also has an impact on the gross domestic product (GDP). The financial scientist Friedrich Schneider estimates that taxes and social security contributions amounting to 2.4 billion euros will be lost as a result.
Schneider has been calculating the volume of undeclared work for a long time. Due to high prices and the effects of the energy crisis, the economist has revised the figures for the current year upwards by 20 billion euros. At the beginning of 2023 he had forecast an increase in the shadow economy to 443 billion euros.
It is expected that the numbers could continue to rise, particularly due to higher unemployment rates. The Institute for Labor Market and Occupational Research expects the unemployment rate to rise in the coming months.
These developments have a significant impact on the German market and the financial sector. The shadow economy has a negative impact on GDP because government revenue is lost through taxes and social security contributions. This, in turn, can lead to budget deficits and affect economic growth.
In addition, undeclared work leads to unfair competition as illegal workers can often work at lower prices. This can put legitimate businesses at a disadvantage and put jobs at risk.
The state is required to take measures to combat undeclared work. This can be done, for example, through increased controls, closing loopholes and improving working conditions in precarious sectors. This is the only way to effectively counteract the shadow economy and minimize the financial impact.
According to a report by www.n-tv.de
Read the source article at www.n-tv.de