Although 89 percent of Romanians know it is illegal to not pay taxes or to avoid declaring their income, 1 out of 2 participants to a Mastercard study believe avoiding to pay taxes is justified, because they are too big, and the money collected is not used properly.
According to a Mastercard survey conducted by Ipsos on the topic of awarness of the underground economy and on attitude towards it named ‘Perception on grey economy in Romania,” 8 out of 10 Romanians believe they can fight against grey economy with the help of electronic payments.
The study also shows that, 4 out of 5 respondents would like to pay more often with the bank card, as a solution to stem underground economy, while half of them believe shops should be compelled to offer clients the possibility to oay by POS. Moreover, 8 out of 10 Romanians believe underground economy can be stemmed if the clients asks for the receit.
„Most Romanians are aware of the negative impact of the grey economy on the public finance and consequently, on the standard of living. They want to help public authorities to fight against the underground economy and believe that electronic payments are a way to limit the effects of untaxed economy. That is why they want to pay by bank card more often. And, in order to be able to do this, they want more transparency from both the authorities, as well as from businesses,” Cosmin Vladimirescu, Mastercard general manager said.
Awareness of grey economy increases with age
Awareness of grey economy increases with age, the study found. In Romania, the grey economy is associated, mainly with working without a working contract and with failure to declare all or part of transactions in order to avoid paying taxes but also with the non-declaration of income, smuggling and tax evasion.
A total of 66 percent of participants to the study are aware of the existence of underground economy, and the degree of awareness of this issue goes up with age: 1 of 3 respondents aged 15-24 heard of the grey economy, while 9 out of 10 Romanians aged 55-64 know about it.
Quality of public services impacted by underground economy
Most Romanians (84 percent) believe the state cannot provide public good quality services they are entitled to due to the untaxed economy, and 9 out of 10 respondents beliee the undeground economy represents an obstacle for the economic growth of the country.
According to 92 percent of Romanians, public authorities should lead the efforts to combat the underground economy. Moreover 8 out of 10 Romanians are ready to support efforts by the authorities in the fight against the underground economy. On the other hand, 42 percent of respondents believe regular citizens have no influence on the grey economy, while 40 percent of them disagree.
Tax avoidance can be justified
7 out of 10 Romanians believe most money obtained from tax are used in an unjustified way and that the money saved by combating the grey economy should be spent on public services, such as education, the public healthcare system and road infrastructure.