Government intensifies actions against the grey economy with a new strategy and an extensive action plan
11.6.2020 Ministry of the Interior
The Government has issued a resolution on a strategy and action plan for tackling the grey economy and economic crime in 2020–2023. Actions against the grey economy and economic crime will focus on prevention, clarification of powers, improving authorities’ access to information, and promoting cooperation between authorities.
The strategy for tackling the shadow economy and economic crime aims to:
1) promote healthy competition between companies and a fair labour market,
2) prevent the grey economy and economic crime,
3) ensure the ability of authorities to combat the grey economy and economic crime, and
4) develop measures to combat the grey economy and economic crime and improve cooperation between authorities.
The means to implement the strategy and to strengthen the fight against the grey economy are listed in the 20-point action plan.
“The plan focuses, among other things, on the prevention of undeclared work. In addition, the aim is to examine new ways for intervening in intentional or grossly negligent underpayment of wages. Cooperation between authorities will be increased in the fight against identity misuse and food fraud. Anti-corruption efforts will also be intensified,” says Chief Superintendent Juha Tuovinen from the Police Department of the Ministry of the Interior.
Other actions set out in the action plan include, for example, introduction of tax numbers in the shipbuilding sector and increasing the availability of information on the payment of taxes and charges. Communications and access to information will also be developed.
“A communication campaign aiming to promote responsibility among employees and employers will be targeted at immigrants and those just entering working life. Securing the tax authority’s access to information from third parties reduces the opportunities for grey economy activities,” says the director of the Tax Administration's Grey Economy Information Unit, Janne Marttinen.
Work led by the steering group on combating the grey economy
The steering group on combating the grey economy, chaired by the Minister of Employment Tuula Haatainen, is in charge of implementing and updating the strategy and monitoring the implementation of the plan.
The executive group on combating the grey economy and economic crime, composed of ministries and authorities, reports to the steering group on the progress of the action plan and, if necessary, proposes changes to the strategy or action plan.
Combating the shadow economy prevents illegal activity and ensures tax revenue – the results are encouraging
The statistics on the prevention of shadow economy and economic crime in 2019 have been published. The experiences gained from the new procedures and law amendments to combat the phenomena more efficiently are positive.
Based on the statistics, the co-operation between authorities in combating the shadow economy and economic crime is efficient and works well. For example, the Finnish Tax Administration gave other control authorities close to 750 tips on misconduct related to matters other than taxation discovered during its own control activities.
‘The statistics show successes. The Action Plan against the Shadow Economy and Economic Crime has offered new tools for identifying and preventing these phenomena,’ says Janne Marttinen from the Grey Economy Information Unit of the Finnish Tax Administration.
The current and previous action plans have been in force almost continuously since 1996. The preparations for a new action plan are nearly complete.
‘During difficult times, the importance of combating the shadow economy is emphasised. The work done to combat the shadow economy ensures tax revenue and public financing,’ Mr Marttinen continues.
New phenomena challenge the traditional operating methods
The rapidly progressing digitalisation and increasingly international operating environment have presented new challenges to combating the shadow economy.
For example, the growth of the platform economy and the popularity of e-commerce, as well as virtual currencies and the related misuse, have expanded the need for control and guidance.
‘In the future, identifying new phenomena and co-operating when responding to them will be increasingly important,’ Mr Marttinen says.
Link: Shadow economy prevention statistics, 2019