Money laundering: Klingbeil wants to strengthen the fight against undeclared work

Federal Finance Minister Lars Klingbeil (SPD) wants to reinforce the fight against undeclared work and tax evasion with a law reform. The aim is also to have significant additional revenue for the state. Tax evasion and undeclared work should be fought “at the sharpest”, it said from the Ministry of Finance. In order to strengthen the financial control of undeclared work, the Federal Cabinet wants to get a draft law on Wednesday.

Investigations should become more efficient

The financial control undeclared work should be able to act powerfully against serious economic crime and organized crime, it said. Better digital networking and better data exchange between authorities are planned. In the future, financial control should be much more targeted against such employers who, due to undeclared work and minimum wage violations, were enriched at the expense of honest competitors, occupied employees and the welfare state.

The aim is to better filter out “black sheep” among subcontractors, such as on large construction sites. At the same time, legal loyalty could expect fewer exams.

Barbershops and nail studios

As part of a “risk management”, the financial control should focus on new focal points of undeclared work – in government circles of Barbershops, in which not only undeclared work, but also money laundering and the integration into structures of “clankrimality” can be observed.

Illegal employment and sometimes exploitial forms of employment can also be found in nail studios. Therefore, the hairdressing and cosmetic industry should be included in the catalog of industrial work affected by undeclared work.

Specifically, this means that employees have to have their ID card with them and present them if they are controlled by customs. So far, this applies to industries such as construction or gastronomy. Employers must immediately report new employees to the pension insurance.

The financial control of undeclared work should also be included in the police information network – this means that it should be able to identify illegally employed and criminals themselves in the future. In order to relieve the judiciary, the financial control should also be able to guess fraud.

The changes in the law should also ensure a positive contribution to the consolidation of state finances, as it was said. According to a forecast, it is about two billion euros in additional income for the federal government, countries and social security until 2029. Klingbeil had already announced that it would like to strengthen the income side through an intensified fight against tax fraud and financial crime. In the federal financial planning for 2027 to 2029, billions in gaps gap.