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Czech experts believe EET may only slightly reduce grey economy

Xinhua, November 19, 2016 Adjust font size:

According to the estimation of Czech experts and economists, the introduction of electronic records of sales (EET) system could only help slightly limit the grey economy.

This depends a large extent upon whether the management approach taken by the financial administration on the system's operation could really play a role.

Overall, according to the economists, EET could not fundamentally solve the grey economy, because the tax havens and offshore companies and other tax evasion methods will always exist.

According to the data of Czech Statistics Office, the unreported incomes in the Czech Republic were estimated around 170 billion crowns (about 6.8 billion U.S. dollars) annually from 2013.

The Czech Finance Ministry estimated that the implement of EET system will raise the public revenue by about 18 billion crowns.

The introduction of EET system in the Czech Republic could reduce the grey economy in GDP. Whether the government will really have the intended effect and how big the reduction will be are to be discussed, only time will tell, said the manager of Mazars tax consultancy Gabriela Ivanco.

She pointed out that according to recent statistics, the share of the grey economy in gross domestic product (GDP) of the Czech Republic is about 15 percent. The European Union's average is 18.6 percent.

Czech chief economist Lukas Kovanda estimated the grey economy in the Czech Republic amounts to 13 percent of the GDP.

He said that the share of the grey economy in GDP is relatively low in the EU and throughout Europe.

According to analyst Frantiska Bostla, more than 600 billion crowns escaped regulatory oversight last year.

He estimated that after the implement of EET system, the grey economy in Czech will remain at around 500 billion crowns. He pointed out that the tax havens, offshore companies are global problems. In these areas, the Czech Republic does not have effective tools.

Tax consultant Starmanova believes that the mere recording of the cash flow does not have much impact on the scale of grey economy, but the fine for non-compliance of the EET system may have an impact on the total amount of grey economy. (1 U.S. dollar = 25 crowns) Endit