Black economy in Cyprus seen at 4.2% of GDP

The value of undeclared work or “black economy” in Cyprus during 2003 accounted for 4.2 percent of the country’s Gross Domestic Product (GDP), according to the latest figures released in Brussels by the Eurobarometer, which also note that these figures are probably higher today because of illegal immigration.
On the basis of the 2006 GDP, which was CYP8,38 bln or EUR 14.4 bln, the 4.2 percent represents CYP350 mln or EUR600 mln, of which a substantial amount would have been channelled to pension funds and government coffers.
According to Eurobarometer, the main cause of undeclared work in Cyprus lies in low salaries and absence of effective control by the authorities.
The survey said that only 2 percent of Cypriots have said they worked in the past 12 months without declaring it and 35 percent have said they knew somebody who has worked without declaring it.
Illegal immigrants are the most susceptible group to undeclared work, followed by the unemployed and persons providing free lance work. Low salaries, absence of control by the authorities and high contributions to the state are the main reasons that people do not declare their work, the survey said.