With or without VAT? Maltese most likely to pay for undeclared services

The Maltese are the most likely in Europe to say that they have bought undeclared goods or services, a new survey by the EU’s polling arm Eurobarometer found.

Overall in Europe only one in ten respondents said that they had acquired goods or services where they have “good reason to believe that undeclared work was involved” because no receipt or invoice was handed to them.

But in Malta the percentage of those who have done so shoots up to 30%.

The largest proportion of respondents buying illegal goods or services were reported in Malta (30%), the Netherlands and Greece (27%).

The lowest percentage of purchasers of illegal goods or services was reported in Poland and the United Kingdom (5%) and Germany (7%).

When asked which goods or services they had good reason to believe were undeclared, 36% mentioned home repair and hairdressing services, while 40% mentioned healthcare services.

When asked why they had bought these undeclared services or goods, 52% of the Maltese replied that they had only realised this was the case after paying. Only 30% replied that they had done so because undeclared goods and services are cheaper.

Malta also reported a sharp 7-point increase in the percentage of respondents who bought illegal goods and services when compared to another survey held in May 2013.

Since May 2013 the number of respondents who say they personally know people who work without declaring all of their income has shot up by 17 points. The percentage of those who know people who do not declare their income has now reached 37%, which is four points above that reported in all 28 member states.

The survey also shows a low level of trust in the institutions responsible for tackling tax evasion: only 44% trust the tax authorities, compared to 50% in the whole EU, while just 39% trust the labour inspectorate, compared to 49% in the whole EU.

While the survey shows that a large percentage of Maltese are exposed to the black market economy, it also shows that the vast majority consider tax evasion by private firms as “absolutely unacceptable”: 54% of all EU respondents subscribe to this view, but the percentage rises to 74% in Malta.