The underground or ‘black’ economy in Spain is equivalent to 16 per cent of the country’s total economic production. This translates into 168 billion euros that escapes the taxman’s gaze every year and 25.6 billion euros in tax revenue that goes uncollected.
These are the findings of a study carried out by REAF-REGAF, part of the association of Spanish economists. The good news is that this estimate is less than other studies that have placed the amount of annual tax lost at around 40 billion euros, as this study takes into account that not all the ‘black’ money would be taxable. Jesús Quintas, one of the authors of the study, said that the 25.6 billion euros was a “more realistic” figure. He also added that the percentage of fraud is similar to other countries like Germany or Denmark.
The report makes 20 recommendations to fight the ‘black’ economy. These include educating the general public on their duty to pay the correct amount of taxes and using more automated electronic collection methods.