Tax returns shows that some 1.2 million Hungarians are registered by their employer on the minimum wage. Many do work on the side, thereby dodging their tax commitments, the former deputy head of the tax office told daily Magyar Nemzet on Monday.
Szabolcs Vamos-Nagy told the paper that the minimum-wage figure was unrealistic. Based on the tax-return data, he estimated that around half a million people work entirely in the shadow economy.
The paper said that tax evasion – a common trick is to declare as a minimum wage-earner and do work on the side or else work under the radar of the tax authority – is rife in Hungary. It quoted an official of the Central Statistical Office estimating that the hidden economy was worth some 4,600 billion forints (EUR 16.3 bn).
Peter Szabo said that the black economy had grown to represent about 17-18 percent of gross domestic product last year, from 15 percent in 2002.