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View Full Version : What is the truth behind the black economy in Tenerife?



clivey
22-12-2013, 18:58
What is the Truth behind "The Black Economy"? Wow I hope you Folks don`t think this is either a troll post or in fact very very naive.:flatcap:

Where I live in the UK it`s something that exists but not many people seem to worry about it or for that matter resent it either . The only time that it seems to get up peoples craw is when "Benefit Cheats" also do work on the side and seem to be doing better than hard working folks, and I tend to agree with this. Other common examples of the black economy are Pub Workers, Musicians, Waiters, Delivery People, Gardeners , Shop workers, & family relatives all being paid cash in hand where nothing goes through the books.

I`ve been on the receiving end of unfair competition caused by people operating in the Black Economy and barring reporting them to the authorities there is nothing you can do as they are not competing on a level play-field. I`ve also witnessed first hand more than one retail business folding due to prolonged exposure to completely unfair competition.

This thread is really a bit of a cultural and socioeconomic survey as I`m wondering what the Forum Members feel about it on the Island? Do you condone say buying your fish from a crew member cash in hand instead of paying full price at the market or do you honestly prefer to help maintain the local infrastructure and businesses by paying a little more to insure quality , health and safety etc.

On the other hand are you one of the folks that think It`s a cultural norm and Spanish birthright thing. I`ll Pay as little as I can and I don`t care about anything but that. and damn the consequences?


I hope this thread stimulates a nice debate so let`s hear what you have to say:)

bulldog
22-12-2013, 20:43
What is the Truth behind "The Black Economy"? Wow I hope you Folks don`t think this is either a troll post or in fact very very naive.:flatcap:

Where I live in the UK it`s something that exists but not many people seem to worry about it or for that matter resent it either . The only time that it seems to get up peoples craw is when "Benefit Cheats" also do work on the side and seem to be doing better than hard working folks, and I tend to agree with this. Other common examples of the black economy are Pub Workers, Musicians, Waiters, Delivery People, Gardeners , Shop workers, & family relatives all being paid cash in hand where nothing goes through the books.

I`ve been on the receiving end of unfair competition caused by people operating in the Black Economy and barring reporting them to the authorities there is nothing you can do as they are not competing on a level play-field. I`ve also witnessed first hand more than one retail business folding due to prolonged exposure to completely unfair competition.

This thread is really a bit of a cultural and socioeconomic survey as I`m wondering what the Forum Members feel about it on the Island? Do you condone say buying your fish from a crew member cash in hand instead of paying full price at the market or do you honestly prefer to help maintain the local infrastructure and businesses by paying a little more to insure quality , health and safety etc.

On the other hand are you one of the folks that think It`s a cultural norm and Spanish birthright thing. I`ll Pay as little as I can and I don`t care about anything but that. and damn the consequences?


I hope this thread stimulates a nice debate so let`s hear what you have to say:)

the Black Economy in Tenerife is like farting,everyone does it ,but no one will admit to it!!

LUCKY
22-12-2013, 22:30
Originally Posted by essexeddie

What sort of service are you going to be involved in?
Lots of older Brits in Los Cristianos and Americas, but mainly in the winter though.

Well done EE, you have now started 20 questions, Clivey is it animal , mineral or vegetable:flatcap:

clivey
22-12-2013, 22:48
LOL. I did not intend the posts to be connected. I started this thread to genuinely find out what people think.:flatcap:

LUCKY
22-12-2013, 23:06
LOL. I did not intend the posts to be connected. I started this thread to genuinely find out what people think.:flatcap:

Hopefully no offence taken because no offence was intended, Its my strange sense of humour, I may not be very good at humour , but you know what they say 'Practice makes perfect':flatcap:

clivey
22-12-2013, 23:09
None taken at all. LOL Tee Hee.:lol:

Jabba43
23-12-2013, 13:04
British people are amongst the most honest in the EU along with the Scandinavians but about 60% of countries cash deals are the norm. So yes it is a cultural thing. In Central, Eastern and southern Europe people look at the state with contempt and not surprisingly so. Have you seen severance pay in Spain? It is ridiculously beneficial to the recipient. Italy has many social programs like this also with nonsense like 13th and 14th salaries for employees.

So it is steal or be stolen from I think. Mind you at 7% VAT almost not worth it in the Canary Islands, 20-25% VAT in EU countries that must be tempting to pay cash and get that discount.

Taxes are the price of civilization but if you take it too far you end up in a socialist hell hole. If you work in the public sector you are probably more likely to vote for high tax parties, if you work in the private sector you sometimes have no choice but to cut a few corners to feed your family.

essexeddie
23-12-2013, 15:50
I don't intend to name but a few years ago I had some work done on our apartment in Tenerife by a British owned firm.
I asked if I would get a discount if I paid cash. I was told in no uncertain terms "no discount", cash or cheque.

The firm is now Spanish owned, I have had some more work done by them and paid cash with a large discount.

That is probably why a lot of the Southern EU countries are in a bad shape.

.

tfs1
23-12-2013, 16:16
I have had some more work done by them and paid cash with a large discount.

Interesting, I take it they hadn't inflated the original price in order to give the cash discount ?

essexeddie
23-12-2013, 16:19
Not at all, as I had a quote before they changed hands.

clivey
23-12-2013, 20:12
I think it`s fair to say that certain industries ie Fishing & agriculture, Retail , Hospitality et al have always more or less relied on cash in Hand casual Labour all over the Planet.

I`d be cautious about paying cash /no receipt for any Automotive/ mechanical/ building work on Tenerife ( Unless a tiny Job) as sometimes that scrap of paper is all you have when things go Pear Shaped.

As I stated on the original post I`ve been a victim of unfair competition from bogus sellers and sometimes Legit Market Traders and it hurts big. The only consolation you can give yourself is that the customer probably would not have been one of yours anyway, but the harsh reality is that if you have a huge Tax bill sitting and poor cash flow you`d quite happy give the Cowboys a visit with a shotgun. ( Metaphorically Speaking)

On the other Hand My 3 brothers all own business`s in the automotive Game and for years I`ve paid Mates Rates, a pittance in cash for No Receipt work Parts etc.

Regarding Spain. I think the autonomo is a feeble attempt to collect cash from folks that the Government quite obviously don`t trust to declare . I`m sure it and other tax stuff like the no VAT exemption thing definitely discourages legit small-timers more or less forcing them to trade below the Radar or give up and Retire.

Muppet
24-12-2013, 03:20
I think it`s fair to say that certain industries ie Fishing & agriculture, Retail , Hospitality et al have always more or less relied on cash in Hand casual Labour all over the Planet.

I`d be cautious about paying cash /no receipt for any Automotive/ mechanical/ building work on Tenerife ( Unless a tiny Job) as sometimes that scrap of paper is all you have when things go Pear Shaped.

As I stated on the original post I`ve been a victim of unfair competition from bogus sellers and sometimes Legit Market Traders and it hurts big. The only consolation you can give yourself is that the customer probably would not have been one of yours anyway, but the harsh reality is that if you have a huge Tax bill sitting and poor cash flow you`d quite happy give the Cowboys a visit with a shotgun. ( Metaphorically Speaking)

On the other Hand My 3 brothers all own business`s in the automotive Game and for years I`ve paid Mates Rates, a pittance in cash for No Receipt work Parts etc.

Regarding Spain. I think the autonomo is a feeble attempt to collect cash from folks that the Government quite obviously don`t trust to declare . I`m sure it and other tax stuff like the no VAT exemption thing definitely discourages legit small-timers more or less forcing them to trade below the Radar or give up and Retire.

I can quite see why you find the Spanish autonamo system different to comprehend because it is just that - different. I'm not sure I would call it feeble though, and no matter, it is the way it is and if you want to be self-employed it is the only way.

I have a feeling you are confusing things a little too, VAT exemption for example - what VAT exemption?. As a "sole-trader" here you are required to be autonamo and are required to charge the Canarian equivalent of VAT (IGIC) on every invoice and submit quarterly returns to the tax man. Unlike other tax regimes there is also no turnover threshold below/above which IGIC returns are required / not required. It applies to every transaction.

clivey
24-12-2013, 11:47
Unlike other tax regimes there is also no turnover threshold below/above which IGIC returns are required / not required. It applies to every transaction.


LOL that`s what I thought I said too.

re " feeble" I`m really questioning it`s motive rather than jt`s effectiveness

Muppet
24-12-2013, 12:00
LOL that`s what I thought I said too.

re " feeble" I`m really questioning it`s motive rather than jt`s effectiveness

I'll get my coat (and some new specs!)

Balcony
24-12-2013, 12:20
You don't have to look so far for the black economy. In Tenerife it starts with people who are normally resident, but have failed to register as such and work (illegally) in bars etc for cash payment. The owner of the business must bear some responibility for this also; probably paying 'off the book'.

There are plumbers etc who are not propery registered (and thus not insured, remember). There are property rental 'agents' who are not agents, but just another resident.

Then of course, the biggest culprit, producing elaborate, confused legislation. I wonder who that could be?

kathml
24-12-2013, 16:17
When I get honest polititions in any country I'll gladly pay tax but until then anything goes

essexeddie
24-12-2013, 20:20
When I get honest polititions in any country I'll gladly pay tax but until then anything goes


Well said :)

Jabba43
24-12-2013, 22:17
Just paid 17000 euros in stamp duty to the Canary Government, that hurt. Was going to pay 30% cash to reduce it but decided against it.

clivey
24-12-2013, 22:29
Just paid 17000 euros in stamp duty to the Canary Government, that hurt. Was going to pay 30% cash to reduce it but decided against it.



LOL. Merry Xmas to you when it comes.:lol:

Jabba43
24-12-2013, 22:44
LOL. Merry Xmas to you when it comes.:lol:

At least I can sleep well knowing I have paid for another pen pusher for another year to make all our lives hell :)

Lissalyon
11-01-2014, 18:48
That's 14,000. What was that for?