According to unofficial estimates, some 400,000 people work illegally and the state loses around 11 billion kuna of budgetary funds annually due to the grey economy, Sanader said.
At the end of last year the government adopted a three-year programme to curb the grey economy, the State Inspection Law was amended to increase inspectors' powers, the financial police were reorganised and a reform of the judiciary was launched.
The SSSH has declared 2005 the year of the fight against black labour and it was this year for the first time that the political will to start dealing with the grey economy was demonstrated, SSSH leader Vesna Dejanovic said.
Along with necessary legislative changes, which will ensure more efficient prosecution of perpetrators, a reform of the tax system should be launched to raise the tax base and reduce taxes, Dejanovic said.