This is shown by a survey on the grey economy and its connection to electronic payment conducted by Visa Europe, the consulting firm A.T. Kearney and expert Friedrich Schneider.
This is the first time the survey includes Croatia, applying the same methodology as in 30 other European countries.
The methodology is used in the whole of Europe and differs from the methodology used by the national statistical office (DZS) as well as from figures released by the Croatian government, a representative of A.T. Kearney, Domen Zadravec, said.
Zadravec said the high level of the grey economy of close to 30% meant that something should be done, and that one of the main solutions to the problem, not only in Croatia but in the whole world, was an increase in electronic transactions or electronic payment.
Even though digitisation, Internet and mobile phones pervade people's lives around the world, a great deal of transactions are performed in cash because cash is not that visible and is the easiest way of getting into the area of the grey economy, said Zadravec.
He added that the grey economy in Western Europe accounted for 10-15% of GDP, with Germany, Great Britain, Spain, Italy and France having the highest rates due to their huge GDP volume. In Switzerland, the grey economy accounts for only 7% of GDP, and in Croatia it accounts for 28%, similarly as in Romania, Lithuania, Latvia and Estonia.
Visa Europe country manager Gorana Perisic Kranjcec said the two main characteristics of the grey economy, including in Croatia, were undeclared work (accounting for two-thirds of the grey economy) and the non-registration of a business's full scope.
Analysed by sector, undeclared work and the grey economy in Croatia are most frequent in construction, trade and tourism.
The share of the grey economy in Croatia decreased mildly in the period from 2009 to 2013, from 30% to 28% in 2013, when fiscalisation was introduced, which Perisic Kranjcec said could be owing to fiscalisation.
Visa Europe manager for Romania, Slovenia and Croatia Catalin Cretu believes that the grey economy is not being monitored closely enough in Croatia and that state institutions should do more in that regard.
Electronic transactions as well as online trade should be encouraged because they contribute to reducing the grey economy, as evidenced by surveys which show that a 10% increase in electronic transactions over a period of four years results in a 5% decrease in the grey economy, said Cretu.