Significant increase in undeclared work last year

Hamburg – Customs financial inspectors uncovered total damage from undeclared work amounting to €766 million in 2024. This was announced by the new Federal Finance Minister and Vice Chancellor Lars Klingbeil (SPD) to the daily newspapers of the Funke Media Group (Tuesday editions) before the presentation of the Customs' annual report this Wednesday. This represents a significant increase compared to the previous year. In 2023, the damage resulting from criminal and administrative fine investigations in Germany amounted to €615 million. Experts assume that the number of unreported cases is likely to be significantly higher. Finance Minister Klingbeil emphasized: "If we further intensify investigations, we will uncover even more, protect people from exploitation, and secure state revenue." The SPD politician announced to the Funke newspapers a draft bill to better combat undeclared work, which his ministry intends to introduce before the summer break. "We will use automated data analysis to evaluate large amounts of data and thus track down undeclared work." "A complete exchange of data between social, financial, and security authorities" will contribute to this, according to Klingbeil. "Because anyone who works illegally or has someone else work for them pays neither taxes nor social security contributions – this causes massive damage." According to information from the Funke newspapers, "modern data analysis and risk management" will also be used in the fight against undeclared work, for example with the help of artificial intelligence. The financial controllers' focus is therefore on the hairdressing industry, cosmetics and barbershops, and nail salons. At the same time, Klingbeil announced a "tougher approach" against criminals "who enrich themselves at the expense of the general public." The SPD politician said: "The rule of law must take action here. This is a question of justice." The minister wants to create further investigative tools in the fight against tax evasion, illegal employment, money laundering, and financial crime. This includes reversing the burden of proof in asset confiscation. "Anyone who owns suspicious assets must then prove that they acquired them legally," Klingbeil told the Funke newspapers.