Tax fraud is the most common economic crime
Typical economic offences are tax offences, accounting offences and offences by a debtor. Other economic offences include fraud, embezzlement, securities market offences, environmental crimes, food crime, business secret offences, employment offences and human trafficking for labour exploitation.
The police receive annually approximately 1,800–2,000 reports of suspected economic offences. Of these, around 700–800 are tax offences and around 400–500 are offences by a debtor. Most of the tax offences reported to the police are committed in business or comparable activities.
The general economic situation also affects the number of economic offences reported to the police. When the economy is doing well, there are clearly fewer reports to the police than when the economy is doing badly. The effects of the coronavirus crisis on economic crime investigations are likely to be reflected with a slight delay.
Grey economy causes major economic damage
The grey economy refers to lawful business activities where the statutory charges and taxes are left unpaid. Estimates of the grey economy’s share of Finnish GDP range from EUR one billion to up to EUR 14 billion. Crime entails economic losses for society when taxes and tax-like payments are left unpaid. Estimates of such losses range from a few hundred million euros to five billion euros annually. As the grey economy is mostly hidden, only some of these activities become known to the authorities.
In addition to lost taxes, the grey economy causes significant losses to entrepreneurs that operate within the law, as it weakens their ability to compete. It also offers domestic and international organised crime a way of spreading its influence within the economy and other societal structures. The construction and restaurant sectors are particularly problematic, but the grey economy also thrives in the transport sector, cleaning business, the shipbuilding industry and trade with Russia.
Strategy for Tackling the Grey Economy and Economic Crime
The Strategy and Action Plan for Tackling the Grey Economy and Economic Crime for 2020–2023 were adopted on 11 June 2020.
The objectives of the Strategy for Tackling the Grey Economy and Economic Crime are to:
- promote healthy competition between companies and a fair labour market,
- prevent the grey economy and economic crime,
- ensure the ability of authorities to combat the grey economy and economic crime,
- develop measures to combat the grey economy and economic crime and improve cooperation between authorities.
The aim is to intensify cooperation between the authorities and make it more effective in supporting the supervision of undeclared work and identity theft, and the combating of food fraud. Supervision will focus on identified risks.
Many authorities will engage in cooperation, for example to prevent and detect the abuse of foreign labour and human trafficking for labour exploitation.
- Government Resolution on a Strategy and an Action Plan for Tackling the Grey Economy and Economic Crime for 2020–2023 (in Finnish)
- Grey economy & economic crime website
- Tax auditing and shadow economy | Vero.fi Link to another website
- Combating money laundering and terrorist financing
- Anti-corruption efforts | Ministry of Justice