Fighting Grey Economy: Voucher Scheme to Help Lower 18% Loss to Europe’s GDP

Written by | Monday, July 16th, 2018
@Eubulletin

European countries are encouraged to voucher schemes to evaluate whether they could be used to fight the grey economy. The report by the European Platform on Declared Work states that “governments should consider conducting pilot initiatives using some variant of voucher schemes and evaluate its effectiveness at tackling undeclared work”.

 

EU member states are being encouraged make more effort to combat the grey economy by creating incentives for people to declare the previously undeclared work instead of trying to detect and punish such work. The EU defines undeclared work as “any paid activities that are lawful by nature, but not declared to the public authorities”. The EU Parliament estimates that the cost of the grey economy to the EU’s gross domestic product is more than 18%. In 2017, six EU countries used service voucher schemes: Austria, Belgium, France, Greece, Lithuania and Sweden.

 

The report states that “there is currently little ex-ante and ex-post evaluation of either deterrence or preventative policy measures in EU Member States, and a marked lack of pilot studies”, adding that there is “lack of evidence on what works and what does not”. Overall, EU governments are not very active in making the investment needed in voucher schemes, although there is an urgent need to transform undeclared work into declared work or at least achieve higher levels of declared work to increase tax and social contribution levels. One of the reasons for this is that member states perceive the voucher schemes as one of the least effective types of measure for tackling undeclared work.

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