Around 100,000 people are believed to be employed in the grey economy, which causes damage to the budget amounting to around seven billion kuna. The most common forms of the grey economy in Croatia are black labour and illegal trade in goods, fictitious business transactions, illegal border crossings, and tax evasion. What additionally contributes to the grey economy is the slow processing of criminal and petty offence charges, insufficient coordination of the work of bodies of state administration, the low level of tax morality, inefficient judiciary and the undeveloped system of incentives for lawful employment.
The government has underlined the need for efficient and timely judicial action, including the annulment of the statute of limitations for offences referring to any form of illegal operations and employment and sale of goods and services which are not stated in business records and accounts. The measures also include covert inspections of the work of border veterinary services in light of unreported trade in animals and food products on the border with Bosnia-Herzegovina. Measures aimed at preventing the grey economy in tourism include the implementation of the new Maritime Code and increased inspections of charterers. Under the new Maritime Code, the only allowed charter of vessels will be the charter of vessels registered in Croatia. The Law on Tourism Business will give greater powers to business inspectors to control the lease of facilities. The government also plans to re-establish financial police (abolished in 2001) to strengthen the financial discipline of budgetary users and prevent the evasion of payment of budgetary revenue. The government expects this measure to yield results especially in the collection of special taxes. Analyses show that the collection of budgetary revenue in that area has been constantly below expectations, while the number of goods that are subject to special taxes has been continually increasing in the market.