Derek McDowell
Question:66 Mr. D. McDowell asked the Taoiseach the way in which income earned in the so-called black economy is accounted for in compiling national income statistics; and if he will make a statement on the matter. [14768/95]
Written Answers. - National Income Statistics.
The Central Statistics Office includes estimates of incomes earned in the black economy in the Gross Domestic Product. When necessary, the basic data on incomes are adjusted upwards to incorporate estimates for hidden economic activity. An example is the adjustment made for non-reporting and under-recording of incomes by self-employed traders where the basic data on incomes are derived from the tax collection system. These incomes are grossed using factors calculated by comparing the numbers of self-employed recorded in the Census of Population and Labour Force Surveys with the numbers making tax returns.
Income earned from black economy activities is also indirectly captured in other components of the GDP. For instance, the labour supply approach used to estimate wages and salaries will capture earnings not reported to the tax authorities. Also, income from agriculture is measured indirectly using the so-called output approach and is not dependent on the tax declarations of farmers.