Black economy costs Ireland €6bn annually

The "black" economy is costing Ireland €6bn a year, of which €2bn is unpaid taxes, according to business lobby group ISME.

Addressing ISME's annual conference in Kilkenny, chairman Robert Berney called for Government action to tackle the illegal activities of people who participate in the shadow economy.

The core of black economy activities is estimated to account for between 5% and 6% of GDP annually, Berney said.

He claimed that the "alarming rate" of growth in the shadow economy is caused by increased business costs including local government charges, insurance, labour and energy costs.

"Whether we like it or not, Ireland has become an expensive and difficult place to run an enterprise and many businesses are being forced into the shadow economy simply in order to survive," he said.

Mr Berney called on the Department of Justice, in association with CAB the Gardaí, Revenue and other state agencies, to co-ordinate their resources to identify individuals, companies and particular sectors who are operating in the shadow economy.

ISME also wants insurance reform in order to reduce the cost of premiums as well as a review of the looming proposed changes in taxation such as BIK, and how it might influence individuals to enter the black economy.