Undeclared Work and Fiscal Policy Issues
Journal Title: Journal of Business Management and Applied Economics - Year 2012, Vol 1, Issue 1
Abstract
This paper aims to explain in detail and intelligibly for everyone what particularly means undeclared work, what implications it has on the entire economic and social system, both in Romania and in the other EU member states. Undeclared work, also called work "under the table" is a profitable activity conducted outside the regulated legal basis and is defined as "any paid activity, which is legal in its nature, but it is not declared to public authorities, taking into account the differences of regulatory systems of the Member States. " Work "under the table" is favored in all sectors of the economy in which cash money are handled, context in which commercial activity, in the wider acceptance of the term, is the most favorite area of action. The scope is very wide, from domestic, household, community activities passing through work in agriculture, construction, various industrial branches, sometimes including high-tech ones. Causes of work "under the table" are extremely varied, having a multifactorial determination and are subject to the economic situation of the employee and employer at a certain time, their level of training and not ultimately, by the taxation appreciated as increased by most operators on the labor market, as well as by the legal framework and sanctioning system. Also, the paper aims to present how affected are those who agree to work without an employment contract, the penalties provided by law for both the employee and employer, how things have evolved over time and the effort of European and Romanian authorities to fight against this practice. Undeclared work has negative effects in the short term but especially on long term, both for individuals and for society, as well as for the state budget, being an interdependent relationship between payment of contributions and taxes on one hand and access to social security rights and other social protection measures.
Authors and Affiliations
Daniel Chitoiu, Florentina Susnea
Keywords
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