Working group: Obligation to provide a receipt would combat grey economy in the beauty care sector

Entrepreneurs' statutory obligation to provide the client with a receipt would reduce grey economy activities in hairdressing and cosmetologist services. The information needed on a receipt should also be provided by law.

This obligation would not cause companies an additional administrative burden or costs, if they already engage in good bookkeeping practices and consumer trade.

 

These are the conclusions of the final report of the working group on minimisation of grey-economy activities in the beauty care sector. Appointed by Minister of Labour Lauri Ihalainen, the working group's task was to propose, in partnership with the sector's organisations, ways of preventing sales that bypass the cash register and bookkeeping. In addition to the obligation to hand out receipts, the working group's key conclusions include the payment of salaries into bank accounts, and monitoring and communications.

 

Sales that bypass the cash register and bookkeeping constitute the most significant grey-economy problem among hairdressers and cosmetologists. In tax inspections, 49 per cent of hairdressers and 44 per cent of cosmetologists have been found to engage in grey-economy activities, particularly unrecorded sales or false receipts.

 

The working group also considers it justified to issue employers with an obligation to pay salaries into employees' bank accounts. As this is already a practice in the sector, the proposal would not cause a specific administrative burden or financial costs.

 

It would also be important to maintain official supervision targeted at the sector. Although it has been subjected to a rather small number of tax inspections compared to many other sectors, such inspections have been fruitful.

 

The beauty care sector's self-checks are an important means of tackling the grey economy

 

Entrepreneurs within the sectors in question are currently collaborating with sector’s organisations to develop requirements for self-checks, with the goal of increasing entrepreneurs' and customers' awareness of the problems caused by the grey economy and to promote fair competition.

 

For example, an enterprise which fulfils requirements commits to fulfilling its statutory obligations, to adhere to the general collective agreements of the sector, and to properly insure its operations. Customers, on the other hand, could check whether the service provider fulfils these requirements, on a website set up for this purpose. The plan is to introduce self-checks before the end of the year.

 

Consumer activity is also important to combatting the grey economy. This can be supported by effective communications.  Organisations representing these sectors use their own websites and professional magazines to disseminate information on the harm caused by the grey economy. Equally important are repeated nation-wide campaigns against the grey economy.

 

The working group included representatives of the Ministry of Employment and the Economy, Suomen Hiusyrittäjät, Suomen Kosmetologien Yhdistys and Service Union United – PAM.

 

Combatting the grey economy is one of the government’s flagship projects. This supports healthy competition and strengthens entrepreneurship and employment. Further information on the Ministry of Employment and the Economy's work to combat the grey economy is available at www.tem.fi/greyeconomy  

The report is available in Finnish at www.tem.fi/julkaisut

For more information, contact:

Johanna Lähde, Ministerial Counsellor, MEE, tel. +358 29 506 4694 (Chairman of the working group)

Päivi Kantanen, Senior Adviser for Legal Affairs, MEE, tel. +358 29 504 8938 (working group secretary)

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