Tax regulations have not adjusted adequately to rising unemployment, corruption and taxes since the crisis began. As a result, the underground economy accounts for 24.7% of the national GDP. This figure is up from 17.8% in 2008. This information comes from a report from Gestha, which shows that Spain is way behind neighboring nations such as Germany and France and struggling to changes its productive model to get out of the financial crisis.
Very few people have given specific direction for how to focus on preventing major fraud instead of wasting time chasing minor fraud. Stricter tax oversight would allow us to widen the tax base and lower overall tax rates. This is a major issue that is not being taken seriously, and the government should make the underground economy a major focus of its pending tax reforms.
