Tax-dodging Austrian workers earn as much as legal ones

The "black" employment market was a flourishing enterprise, said the report. In 2000, workers had pocketed an astronomical 272 billion schillings (18.8 billion dollars) without paying tax.

The "shadow economy" was growing twice as fast as the official one. One out of ten Austrians lived entirely on "black" wages. This year the tax-dodgers would probably earn seven per cent more than last.

In the past ten years "black" earnings had gone up three times over, in the past 20 years, ten times over. Current annual losses for the finance minister and social insurers were 60 billion schillings.

Linz economics professor Friedrich Schneider said: "Black working has become a significant part of the economy." Leading sectors were construction, the trades and tourism. Hairdressers, babysitters and private tutors were also among enthusiastic tax-dodgers. "If the shadow economy continues to expand so quickly, ever fewer individuals will be willing to pay their taxes honestly," Schneider warned.

Tougher penalties would do little to help. Austria should far more tackle the problem at its roots, which were the high level of social security contributions taken out of wage packets, he said.

(la/dpa)