The size of the shadow economy in Greece is estimated at 41 billion euros, according to calculations by the head of the Parliamentary Budget Office, John Tsoukalas.
He explained that the total amount of fiscal space that can be secured from the execution of this year’s state budget reaches 1.5 billion euros and should be fully utilized to reduce taxation on salaried workers by establishing a more progressive tax scale, in which the 44% tax rate on incomes slightly above 40,000 should be lowered.
Tsoukalas clarified that the total amount of the shadow economy, that is, the amount of income that is not recorded in the official economy, is obtained by subtracting the amount of private consumption from the total amount of income declared to the Tax Administration.
Therefore, if we take into account that the total of declared income for the year 2023 was 110 billion euros and the total of private consumption reached 151 billion euros in the same year, the size of the shadow economy can be estimated at 41 billion euros, an amount that corresponds to approximately 16%-18% of the country’s GDP.
It is noted that the shadow economy refers to all economic activities that take place outside the official and regulated economic system. Specifically, it includes economic activities that are not officially recorded, not taxed, and often not conducted under state rules or regulations. The shadow economy has the following key features:
- Undeclared labor.
- Sales of products or services without issuing receipts.
- Movement of goods that are not declared to the relevant authorities.
- Tax and social security contribution evasion.
- Illegal activities, as well as legal ones that are simply not declared.
