The National Audit Office's report on the Swedish Tax Agency's measures against undeclared work

Ida Ekeroth Clausson (S)

Madam Speaker! Tonight we are debating the Swedish National Audit Office's report on the Swedish Tax Agency's measures against undeclared work. The audit highlights a serious societal problem that threatens both the legitimacy of the tax system and the funding of the common welfare.

The fight against illegal work is, however, something that the government unfortunately does not prioritize. One can observe this just by looking at today's speaking list; only a single representative from the government parties can imagine debating the Riksrevisionen's report. It is a report that shows that more needs to be done.

Another new report comes from the Expert Group on Public Economics, ESO. They estimate the extent of the criminal economy to be over 350 billion kronor. Of that, the black economy is judged to constitute 64 percent. It is a staggering sum. It should stand beyond all doubt that the efforts against the black economy and black labor must be further strengthened.

Labor incomes that are withheld from taxation are a significant societal problem. The result of omitted measures is devastating. The state's revenues are eroded. Serious companies risk being competed out, and workers are exploited. This occurs simultaneously as the government's policy consistently favors the very richest at the expense of ordinary people, which is noticeable in society through long healthcare queues, fewer teachers, and a reduced state presence.

The extensive criminal economy in Sweden is closely linked to gang crime. The gangs know which businesses they can squeeze tax money out of, for example through companies with undeclared work or through VAT fraud.

We need to choke off all possibilities for financing the gangs. Powerful measures against illegal work are one of the ways to do that. Furthermore, it is extremely important that we ensure that people are not exploited and that serious companies see that it pays to behave and do the right thing.

Tax evasion and undeclared work are not only a matter of missing tax revenues but also a matter of justice and trust. Ultimately, it is about the legitimacy of our social contract. Every tax krona must be used effectively, and everyone must contribute according to their ability. Safeguarding this is a central priority for us Social Democrats.

Black market work can occur in different ways. It can involve underreporting of income, which is most common in businesses with direct payment, such as restaurants and hair salons. Another way is overreporting of costs. That setup is most common in industries with subcontractors in multiple stages, such as the construction industry. Legitimate and black money are mixed and sent further between different accounts at different companies and across national borders. It is therefore becoming increasingly difficult for the Swedish Tax Agency and other authorities to monitor the operations.

Madam Speaker! The Swedish Tax Agency counters illegal work through controls and preventive work. The controls shall make it possible to detect and correct errors, prevent errors from occurring, and counter crime. The preventive work aims to reduce the risk of errors through, among other things, industry cooperation, information, and guidance. All measures also aim to increase confidence in the tax system and the will to do the right thing.

In the annual reports for 2023 and 2024, the Swedish Tax Agency pointed out that the tax audit of companies could not be carried out to the planned extent, partly due to a large proportion of manual processing. In the budget basis for 2024–2026, the agency assessed that the number of audits was approaching a level that was not reasonable for maintaining trust, reducing tax errors, and managing the highly valued tax error risks.

In another previous audit, the Swedish National Audit Office has shown that the rot deduction has had a significant impact on reducing households' demand for black craft services. But even though the rot services are perceived as white by households, black wages can be paid out in one or more stages beyond the consumer level. The Swedish National Audit Office therefore judged that additional measures beyond the rot deduction were required to counteract that type of black work.

The extensive occurrence of undeclared work, Skatteverket's problems with maintaining a reasonable level of control, and the need for additional measures indicate that there is potential to improve Skatteverket's ability to counter undeclared work. More effective measures against undeclared work can strengthen the funding of the public sector and contribute to a well-functioning society for the public and companies.

The Social Democrats share the Swedish National Audit Office's assessment that the Swedish Tax Agency lacks sufficient tools and powers to effectively tackle complex and systematic undeclared work. It is particularly serious that deficiencies in follow-up and feedback hinder a continuous and accurate way of working. This underscores the need for both regulatory changes and increased resources, which the government should address urgently.

The Swedish National Audit Office submits the following recommendations to the Swedish Tax Agency: to broaden the information base for risk analysis through, for example, more random checks and inter-agency cooperation, ensure that the risk analyses have an impact on the planning and prioritization of measures against undeclared work, petition the government for regulatory changes that can strengthen investigations of complex and systematic undeclared work, and develop better methods and system support to continuously monitor the results of measures against undeclared work.

The Riksrevision’s audit of the Swedish Tax Agency’s measures against undeclared work thus concludes that there are deficiencies, and recommendations for measures are provided. Despite this, the government considers that there is no reason to take any measures on the basis of the Riksrevision’s report.

We Social Democrats wanted to allocate an additional 75 million to the Swedish Tax Agency just to expand the controls, but the government said no. Therefore, we ask: Why does the government not consider black market work to be a major problem?

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Boriana Åberg (M)

Madam Speaker! Thank you, Ida Ekeroth Clausson, for the speech!

I think it started really well; we are in complete agreement that black labor and the black economy should be fought with all means. On the other hand, we do not agree on the government's efforts. I want to assert that no other government has done as much to fight the criminal economy as the current one. But I shall speak of that in my speech, because the two minutes I have for the reply are not enough to mention everything that the government has done and intends to do.

I would appreciate it if Ida Ekeroth Clausson were a bit more self-critical. In addition to the Tax Agency having to conduct a proper audit so that no one abuses the rules and uses black labor, the companies must also show their own responsibility and not hire black labor or subcontractors who use black labor.

The municipally owned energy company Göteborg Energi is currently involved in a large mess involving illegal labor that has been hired for the construction of the Rya combined heat and power plant. It is very irresponsible to use illegal labor, not least considering the tense global situation. One does not only cheat the state of tax revenues and compete out serious companies, but one also acts extremely irresponsibly from a security perspective.

I wonder if Ida Ekeroth Clausson has raised the issue with her Social Democratic comrades who govern the city of Gothenburg.

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Ida Ekeroth Clausson (S)

Madam Speaker! Thank you, Member Åberg, for the question! I am not quite sure what the question was, but of course, we in the entire party discuss that black market work is something we want to address.

We have also submitted proposals regarding, for example, this issue with multiple subcontractors. It is often there that problems can arise. We have wanted to resolve this, but the government has said no. They do not think it is a problem. The member should therefore speak with their own party and with the government themselves.

It is exactly as you say: The public sector has difficulty keeping track of how the construction industry operates. If not even we can keep track of what is happening, how then are the private companies supposed to be able to do so when they subsequently hire others?

We could stop this by limiting the number of subcontracting links. But the government shows no interest in putting a stop to it.

As has been said, there are several measures that would need to be taken. One way would be to give more money to Skatteverket, as we wanted, so that they could carry out more controls. But the government did not want to do that, so my question is: If the government wants to combat the black economy as much as is said it wants to, why don't they do more?

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TREDJE VICE TALMANNEN

I remind you of the rules of the chamber.

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Boriana Åberg (M)

Madam Speaker! I did not receive an answer to my questions. To clarify, I shall repeat them: Has Ida Ekeroth Clausson asked her social democratic party colleagues in Gothenburg how it happened when they hired illegal, black-market labor to work at a protected site? Has Ida Ekeroth Clausson asked her social democratic party comrades who run Göteborg Energi and Göteborgs kommun what they intend to do to avoid hiring black-market labor in the future?

The concern for what can happen in the Port of Gothenburg, which is a protected site and strategically important for both Sweden's economy and Sweden's defense, but also the concern that people are being exploited, was expressed by Ida Ekeroth Clausson so well and so genuinely when she stood at the rostrum. I cannot make this add up. At the rostrum, the Social Democrats are against black labor and against the exploitation of people. But in reality, when they have the power and the control, when it is they who write the contracts with suppliers and subcontractors and can set conditions with hefty fines if these exploit black labor, then it is perfectly okay for them to use black labor and exploit people. How does that add up?

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Ida Ekeroth Clausson (S)

Madam Speaker! The bills that have been submitted during the mandate period regarding, for example, rot and tackling illegal work and such come from investigations that were initiated during the Social Democratic government. The current government has not initiated any additional investigations so that we can tackle illegal work.

We Social Democrats think it is a major problem that the black economy in Sweden is as large as it is. Therefore, we want to implement more measures. We want there to be a stronger regulatory framework. We want the Swedish Tax Agency to receive even more measures to rectify the errors. One way is to limit how many subcontractors one can have. Strong supervision is needed within public procurement, including transparent requirements on owners and subcontractor chains and the possibility to exclude companies that exhibit systematic regulatory violations from, for example, participating in public procurement.

So, even more tools need to be introduced to stop undeclared work, because it is a major problem. Both I and Member Åberg were at Skatteverket as recently as yesterday, and they say that they cannot know exactly how much money is in the shadow economy. Skatteverket cannot determine how much more money could be brought in to the state. But a figure that is used is that there are at least 189 billion kronor in Sweden believed to be from undeclared work.

This is a staggering sum, so I think it would be good if we and the government really worked together to resolve this. It is people who suffer because this activity is allowed to continue. When the National Audit Office says that we have a problem, I think we should take it to heart and do something about it.

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Markus Wiechel (SD)

Madam Speaker! Black market work is a poison in our economy. It erodes the welfare state by billions every year. It undermines honest Swedish companies and exploits people in an invisible shadow.

The Swedish National Audit Office's report from last year is clear: Around 97 billion kronor per year during 2017–2022 were black labor incomes. That is, therefore, 5 percent of all labor incomes that disappear into black holes instead of being able to be used in welfare for school, care, and security for our children and elderly.

This is not a new problem. Shadow work has flourished for decades, especially in industries such as construction, restaurant, cleaning and crafts, often linked to foreign labor or organized crime.

Previous governments, not least social democratic ones, have talked very much about this but acted even less. The controls have been too few, the tools outdated and the priorities too weak. The result has been that serious companies have repeatedly lost contracts to fraudsters who dump prices by skipping taxes and fees. It is not only money that has been lost; justice and trust have been eroded.

Now we finally have a Tidösamarbete in place where we have addressed and are addressing this for real. Just as Boriana Åberg mentioned earlier in an exchange of remarks, there is actually no other government that has fought the criminal economy as much as this one.

I intended to highlight some examples of what has been done.

The Swedish Tax Agency has received stronger powers to audit companies with Fskattsedel.

Active work is being carried out in agency cooperation against crime in the labor market, which is an important weapon against illegal work.

The Government has pushed through referrals to the Council on Legislation to modernize the control tools, including better preservation of evidence in the digital era.

More proposals are in the works, including sharper controls of the rot and rut industry, where the cheating has historically been enormous.

These are concrete steps forward, not just fine words. The government has listened to the National Audit Office's warnings and is acting, just as it should. The report is therefore finalized, and we in the committee are right to add it to the records.

Madam Speaker! I just want to comment on a small detail. When the opposition, especially the Social Democrats, try to portray themselves as great fighters against undeclared work, it echoes a bit hollowly. During their long time in power, the problems grew without sufficient resources or tools being added. Now that a responsible majority is pushing for tougher measures against the criminal economy, which according to the latest ESO report turns over 350 billion kronor annually and where undeclared work is a large part, they choose to criticize instead of contributing constructively and providing solutions.

We Sweden Democrats say no to empty rhetoric. We say yes to functioning tools, realistic priorities and real change. Let us therefore continue that work together for the sake of the Swedish people, for the sake of justice and to stop the cheating once and for all!

With that said, Madam Speaker, I move for the proposal in the report to be approved.

(Applause)

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Boriana Åberg (M)

Madam Speaker! Almost four years ago, the Tidö Government received the Swedish people's confidence to get Sweden in order, to lift the economy, to re-establish the work principle, and to combat crime.

Now that there are less than six months left until the election, we have the results that the government has succeeded well. Sweden has a top ranking in the EU when it comes to growth, and the number of evictions has decreased significantly. The economy has gone up, and crime has gone down. Several seriously criminal individuals are in prison, sentenced to long terms. But much remains to be done.

Madam Speaker! It is well known that the shootings are the tip of the iceberg. Beneath the surface lie advanced criminal structures with false identities, welfare fraud, companies as criminal tools, and exploitation of people. It is a development that, if not stopped, will lead to systemic collapse.

That is why the government has done and is doing a lot to strike against the heavy organized crime and the criminal economy. As was mentioned, it turns over a staggering 352 billion kronor, of which a large part comes from precisely black labor.

In the fight against serious organized crime, not only do the police and the Swedish Economic Crime Authority have decisive roles, but also agencies whose primary role is not crime fighting. One such agency is the Swedish Tax Agency, which is a key actor in countering undeclared work. Therefore, the Swedish Tax Agency has been given better tools, including increased opportunities to monitor companies approved for F-tax. The Swedish Tax Agency also receives new tools to stop VAT fraud and tackle tax evasion.

The Government has submitted the bill Measures against VAT fraud, and at the committee meeting on Tuesday, we will have the first preparation. I do not doubt that the committee, and later the Riksdag, will stand behind the proposals. On July 1, the Swedish Tax Agency will therefore receive expanded possibilities for control in connection with VAT registration and possibilities to deny registration or de-register a person from VAT.

The Swedish Tax Agency will also be given the opportunity to decide that a VAT registration number shall be displayed as invalid in the VAT Information Exchange System, as well as the opportunity to decide that excess input VAT shall not be credited in cases where there is a risk of tax evasion. All these measures will make it more difficult for those who engage in undeclared work.

Madam Speaker! I also want to mention agency cooperation to combat crime in the workplace, which is a growing societal problem estimated to cost taxpayers many billions of kronor annually. This includes tax crimes, benefit fraud, and crimes against the work environment, which lead to distorted competition, unhealthy working conditions, and an increased risk of labor exploitation.

That is why Arbetsförmedlingen, Arbetsmiljöverket, Ekobrottsmyndigheten, Försäkringskassan, Jämställdhetsmyndigheten, Migrationsverket, Polismyndigheten, Åklagarmyndigheten and Skatteverket have a government mandate to cooperate against crime in the working life.

The work against crime in the labor market is not only about stopping illegal activities but also about protecting serious companies and employees. The work has been facilitated by the new law on information sharing and secrecy-breaking provisions, which entered into force in 2024. Within the Government Offices, several proposals are also being prepared regarding improved control tools for Skatteverket, including against companies that provide rot and rutar work.

As Markus Wiechel mentioned in his speech, this was a major problem during the previous government. Many surely remember that even former Prime Minister Magdalena Andersson hired black labor for cleaning in her house. It was admittedly through a company, but it was still a quite significant breach of both rules and morals.

Madam Speaker! After this long introduction regarding the government's work to facilitate matters for the Swedish Tax Agency, I now return to the report we are debating today, which concerns the government's response to the National Audit Office's report on the Swedish Tax Agency's measures against undeclared work.

From the government's response, it appears that the report constitutes a significant contribution to Skatteverket's operational development and continuous improvement work. The report is also judged to be able to contribute to the government's management and follow-up of Skatteverket. The government partially agrees with the Riksrevisionen's criticism regarding the need for Skatteverket to develop clearer follow-up of the results of measures and a stronger connection between risk analysis and measures.

It is worth noting that the Swedish Tax Agency does not provide any recommendations to the government. Thus, the criticism of the government that was just presented by Ida Ekeroth Clausson is misplaced. On the other hand, the National Audit Office directs several recommendations to the Swedish Tax Agency.

According to the recommendations, the Swedish Tax Agency should broaden the information base for risk analysis through, for example, more random checks and inter-agency cooperation. The Swedish Tax Agency should also ensure that the risk analyses have an impact on the planning and prioritization of measures against undeclared work, as well as request the government for regulatory changes that can strengthen investigations of complex and systematic undeclared work.

The day before yesterday, the Committee on Taxation visited the Swedish Tax Agency's headquarters in Sundbyberg, which was also mentioned in a previous speech. There we were informed that much of the newly introduced legislation under the current government follows a request from the Swedish Tax Agency. The government is therefore listening to the Swedish Tax Agency's proposals and providing the agency with tools to perform its work.

The Swedish Tax Agency previously submitted to the Ministry of Finance proposals for new rules to adapt the framework for securing evidence to the technical developments that have, among other things, enabled the use of cloud services. These proposals were handled by the Committee on Taxation in the report Modernization of the Swedish Tax Agency's control tools, and the changes will come into effect on April 1.

Finally, the National Audit Office recommends that the Swedish Tax Agency develop better methods and system support to continuously monitor the results of measures against undeclared work. It goes without saying that monitoring and evaluation are essential to see if the Swedish Tax Agency's work against unscrupulous actors is sufficiently effective and yields the desired results.

With this, Madam Speaker, I move for approval of the proposal in the committee's report.

(Applause)

In this speech, Markus Wiechel (SD) agreed.

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Blåvitt Elofsson (S)

Madam Speaker! It is now about the Committee on Taxation's report SkU33, the National Audit Office's report on the Swedish Tax Agency's measures against undeclared work.

Tax evasion and undeclared work are not minor matters in the margins but direct attacks on our common social contract. Every krona withheld from taxes is one less krona for the school, for healthcare, for elderly care, and for the security that people have a right to expect.

When companies cheat on taxes and fees, competition is distorted. Serious companies that follow the rules are knocked out by unscrupulous actors who push down prices through cheating, poor working conditions, and sometimes outright crime. This affects workers, business owners, and society as a whole.

The Swedish National Audit Office's review of the Swedish Tax Agency's work against undeclared work clearly shows that there are deficiencies. The measures are not sufficiently accurate, the follow-up is inadequate, and the control does not always reach where the fraud is greatest. This must be taken most seriously.

Madam Speaker! The scope of the problem is furthermore significant. The Swedish Tax Agency estimates that black labor income amounts to around 97 billion kronor every year in Sweden. These are funds that should go to our common welfare, such as schools, healthcare, and elderly care. The sum corresponds in magnitude to a very large part of what the state foregoes every year in tax revenue through, for example, the job tax credit.

We Social Democrats therefore believe that the fight against tax evasion must be strengthened. The Swedish Tax Agency and other law enforcement agencies need the right tools, sufficient resources, and clear mandates to be able to strike against undeclared work, false arrangements, and economic crime. Cooperation between agencies must work in practice, not just on paper.

Madam Speaker! For the Social Democrats, this is ultimately a question of justice and solidarity. Our society is built on the principle that all people have equal value and that we contribute according to our ability and receive support according to our need. When some cheat and withhold taxes, that balance is broken. Then both justice and trust in society are eroded.

Everyone shall contribute according to their ability, and everyone shall know that those who fiddle and cheat also risk being discovered. Law-abidingness shall pay off – cheating shall not. If one cheats methodically, one shall also be scrutinized methodically. It is about trust. When people experience that certain individuals get away with cheating, the will to do the right thing is eroded, and the injustices become clear. We risk the legitimacy of the entire tax system being damaged, and that we can never accept.

Sweden shall be a country where work is registered and performed in an honest way, where companies compete fairly and on equal terms and where welfare is financed in a solidary manner. Tax evasion shall not be normalized, but it shall be prosecuted – consistently, in a legally secure manner and with full force. Tax evasion is, in fact, an attack on welfare, and by prosecuting it we safeguard both welfare and trust in our society.

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Boriana Åberg (M)

Madam Speaker! I thank Blåvitt Elofsson for his speech.

I completely agree with Blåvitt Elofsson that cheating must be combated. Cheating must not be allowed to undermine trust in either the state's institutions or the tax system. Those who cheat undermine the opportunity for those who are honest to do a good job, and furthermore, those who are honest are forced to pay for those who cheat.

However, I became very concerned when Blåvitt Elofsson said that the state foregoes tax revenue through the job tax credit. I wonder if I misunderstood or if Blåvitt Elofsson means that the job tax credit is something negative – something unwanted. Why, in that case, have the Social Democrats not abolished the job tax credit?

The earned income tax credit has given many people an extra salary per year, which has made a big difference in whether one wants to work or receive benefits. I want to assert that the earned income tax credits – for very many earned income tax credits have been introduced during the time we have had conservative governments – have only done good for Sweden's population. They have both ensured that people have gained greater freedom and provided greater revenues to the state.

So, is Blåvitt Elofsson against the job tax credit? If so, why is nothing being done about it? Nothing was done during the eight years they were in power.

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Blåvitt Elofsson (S)

Madam Speaker! It is the case that this, too, is largely a matter of justice. As I said in my speech, the job tax credit causes the revenues to the common fund to decrease, and perhaps those funds could have been used instead to help those who are struggling – for example, pensioners who do not receive such high pensions and so on. The money could also have gone to health and care so that we could provide healthcare in a much better way than today. There are many regions that are having a hard time.

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Boriana Åberg (M)

Madam Speaker! I hope it is not the Social Democrats' official line that the job tax credit is wrong and means that pensioners are being deprived of income. It is the opposite: the more people who work, the more money there is for the pensioners. Pensions are, after all, paid for by those who work. More people working means more tax revenue and more money for welfare, for pensions, and for health care and elderly care.

As I said, the introduction of the earned income tax credit is the best thing that has happened to those who work in Sweden. I hope that everyone watching this debate and everyone reading the minutes afterwards notes that the Social Democrats are skeptical – directly negative – towards the earned income tax credit. It is very good information for everyone who gets up in the morning, goes to work, and toils every day, day in and day out. They must have the right to keep more of their money. They should be able to feel that it pays off to work and contribute to the common good.

In order for us to have money to distribute to the pensioners and to the regions – yes, to anything within the welfare system – someone must generate the money. It is the companies that create the jobs, and it is the people who go and work. They are very worthy of the job tax credit. Does Blåvitt Elofsson mean that the job tax credit is not good for the Swedes who work?

In this speech, Markus Wiechel (SD) agreed.

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Blåvitt Elofsson (S)

Madam Speaker! It is clear that the job tax credit is good for those who work and receive it – naturally. They get a higher income and more money to spend. That is how it is. But there are other people, and there are assignments under the auspices of the state, the municipalities, and the regions that need a lot of money. One could perhaps have withheld a part of the job tax credit and sent those funds to the regions and the municipalities.

The deliberation was hereby concluded.

(A decision was to be taken on 25 March.)

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