Thursday 26 April 2018

'Nixer culture' blamed by ISME as part of a €25bn threat to the economy

Mark Fielding
Mark Fielding
Donal O'Donovan

Donal O'Donovan

The State is losing out on as much as €5bn a year in lost taxes because of a "thriving nixer culture".

That's according to the Irish Small & Medium Enterprises (ISME), which said black market activity is "creating havoc for legitimate business" and stopping SMEs from creating new jobs.

The scale of the black economy could be as high as €25bn, with a loss of €5bn in unpaid taxes, according to ISME chief executive Mark Fielding.

The business owners' group said an inter-agency response involving a public education campaign as well as gardaí, Revenue and the Department of Social Welfare is needed.

"As a nation we need a seachange in relation to tolerance of black market activities. Turning a blind eye to illegitimate trade is still part of our culture and must change to protect jobs and businesses. A national campaign to inform people of the cost of illicit trade is a priority.

"The campaign on insurance fraud was reasonably successful and a similar drive against the black market is called for," he said. ISME is concerned about a shift towards a "cash-only" shadow economy.

Tackling

ISME reckons the black economy could amount to 14pc of GDP or around €25bn, based on previous international estimates, the agency's observations and reports from members.

"Tackling the shadow economy needs to be a key feature of the Action Plan for Jobs 2016 and ISME is requesting that a fully funded awareness campaign is initiated immediately to change the culture of tolerance and acceptance of the black economy."

Mark Fielding said its members are enduring specific hardships because of illegal trading activity. It cited:

l A convenience store which will not sell cigarettes for two to three weeks, when a consignment of smuggled cigarettes arrives in the locality.

l A filling station which cannot compete with low-priced diesel which has obviously been laundered and sold as legitimate.

l A contractor undercut on construction jobs due to a 'competitor' involved in social welfare, VAT and wages fraud, without insurance or health and safety precautions for 'off-the books' employees.

The welfare system, which makes it hard for individuals to take on irregular or ad hoc work without losing benefits, is contributing to the problem, ISME said.

"A reduction of the black economy must be a priority," added Mr Fielding.

"While the traditional methods of detection, enforcement and punishment have been used for generations, the overall effect is negligible, as evidenced by the figures.

"Tackling the general culture of acceptance must be the starting point for any new initiative. This can be achieved through use of a media and general education campaign," added Mr Fielding.

Irish Independent

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