These statements were made by Minister of Labour Georges Engel and Minister of the Economy Franz Fayot in response to a parliamentary question by MPs André Bauler and Carole Hartmann from the Democratic Party (DP). According to the National Institute of Statistics and Economic Studies (STATEC), undeclared work costs the state up to €15 million in lost VAT revenue each year. There is also a reduced fiscal value, but STATEC is unable to quantify it.
The ministers from the Luxembourg Socialist Workers’ Party (LSAP) also state that undeclared work has “a clear negative impact” on tax revenues, workplace safety, the right of establishment, and social institutions.
The authorities responsible for monitoring and investigating undeclared work are the Inspectorate of Labour and Mines (ITM), the customs office, the police, and the tax administration.
The ITM, in particular, is in charge of ensuring workplace compliance with labour laws and safety regulations.
Over the last three years, ITM officials conducted approximately 200 internal company audits and issued 240 fines totalling €40,000.
The ministers Engel and Fayot stress that hiring more ITM inspectors would enable the authority to conduct more checks on undeclared work.
