Estonian Tax Board: 1/4 of construction turnover goes to companies paying cash in hand

A quarter of the turnover of the Estonian construction sector goes to companies paying cash in hand wages, according to the Tax and Customs Board.

The turnover of construction companies totaled 160 million euros in July and a quarter of it went to businesses that are probably paying unreported wages, Postimees said citing data from the national tax authority. When the declared monthly gross wage of workers at a construction company is smaller than 807 euros -- which is 70 percent of he market's average -- this is a signal for the tax authority that things may be wrong.

"We have talked to construction companies and they say that you no longer can find a construction worker for less than 1,000 euros net," Kaido Lemendik, deputy head of the control department at the Tax and Customs Board, told Postimees.

The tax authority estimates that the government has lost 5.5 million euros in taxes as a result of the payment of unreported wages in the construction sector this year alone.