Black market ‘needs action’

The Small Firms’ Association has said European intervention might be needed to tackle the ‘black’ economy, saying the problem is only increasing and is robbing as much as €6bn per annum from the exchequer.

The body wants the Government to introduce a series of measures, including an awareness campaign for consumers, highlighting the consequences of buying counterfeit goods or paying cash to illegitimate businesses; an evaluation of the factors influencing taxpayers’ attitudes to the ‘black’ economy; and a review of resource levels for the training of those engaged in tackling the issue.

Speaking ahead of an appearance tomorrow before the Joint Oireachtas Committee on Jobs, Enterprise, and Innovation, SFA chairman AJ Noonan said: “Because of reduced overheads, those who operate within the informal economy have huge competitive advantages and distort the operation of a competitive labour market.

“It is essential that all companies can compete on a level playing field and for the removal of what amount to penalties for compliance through the proper enforcement on the regulations for dealing with those who operate outside the legitimate sector of business.”

According to Mr Noonan losses to the black economy are estimated to be has high as 14% of GDP, “or half a billion euro each month is generated that the taxman does not have access to”.

“As the recession continues, the level of black market activity is increasing,” said Mr Noonan. “When this activity reaches a point where it is impacting on jobs, legitimate businesses and society, action must be taken.

“The number of illegal transactions is growing and this poses a very serious threat to the survival of many registered tax-compliant businesses.

“Due to the scale of the drain on the economy, attempts to tackle the problem are long overdue and, given that sometimes controversial measures are necessary, a European initiative may be required,” the SFA chairman said.