A new report reveals the scale of the phenomenon and the huge tax losses, and the Danish minister describes the situation as “unacceptable.”.
According to BT and quoting Ritzau, the Jyllands-Posten newspaper revealed the results of an extensive study conducted by the Rockwool Foundation, which showed that one in five Danish adults work in unregistered economic activities (known as black work or tax evasion) during one year, which represents a major challenge for the country's Ministry of Taxation and Public Finance.
The study, which was directed to Denmark’s new tax minister, Ane Halsboe-Jørgensen, described the phenomenon as unacceptable, emphasizing its direct impact on the economy and local society.
The tax minister's statement: "This behavior harms everyone."“
Tax Minister Anne Halsbø-Jørgensen told Jyllands-Posten: “It’s a huge problem. If everyone paid their taxes, we could reduce taxes significantly. Tax evasion is in fact evading our neighbors and the local community, as it deprives schools and elderly care of the funding needed for their development.”.
The minister added that she had hoped conditions would have improved since the data was collected in 2021, noting that the study was conducted on a large sample of 16,500 people aged between 18 and 74, making it the largest study of its kind in Denmark to date.
Defining “black market” and losses to the public treasury
The Rockwool Foundation defines “black market” as productive activities that are legal in nature but not subject to taxation or VAT, by mutual agreement between buyer and seller. This includes direct cash payments, barter, exchanged services, and undeclared sales.
According to the report, these activities cost the Danish treasury approximately 13.7 billion Danish kroner annually in lost tax revenue. Despite a number of policy and administrative initiatives, the level of unregistered activities has not decreased for years.
Ongoing government efforts to curb the phenomenon
In 2017, the Danish parliament unanimously passed a resolution to strengthen the powers of tax authorities in order to crack down on the black economy, and earlier this year six ministries collaborated to launch six large-scale national inspection campaigns aimed at uncovering unregistered economic activities in various sectors.
This initiative involved the Ministry of Taxation, the Ministry of Justice, the Ministry of Business, the Ministry of Food, the Ministry of the Interior and Health, and the Ministry of Employment. Part of these campaigns focused on monitoring kiosks and small shops suspected of harboring widespread unregistered workers.
Hopes that the phenomenon would decline by 2025 have faded.
The tax minister pointed out that the data dates back to 2021, which leads her to hope that the situation will have improved by 2025, but the size of the reported losses, along with the continuation of activity despite political efforts, confirms that the challenge still exists for the Danish authorities.
