The $ 7bn Economic Black Hole in the New Zealand Economy?

Today, the Dominion Post published a story that highlighted the fact that there is a shadow economy in New Zealand and that the size of this shadow economy is such that New Zealand is losing some $7bn in tax revenues. The article is said to be based on a report by the Tax Justice Network.

I have located the Tax Justice Network report, it can be found at:
http://taxjustice.blogspot.com/2011/11/tax-evasion-is-worth-31-trillion-year.html

The Tax Justice Network Report is based on the following World Bank Report:
WPS5356 Policy Research Working Paper 5356 Shadow Economies All over the World. http://search.worldbank.org/all?qterm=wps5356

The World Bank Report estimates the size of the shadow economy in 165 countries and in this report New Zealand ranks near the top as an OECD country with one of the smallest shadow economies. The shadow portion of the NZ economy is around 12.4%. The best country (Switzerland) achieves 8.4% of GDP. Only Switzerland, USA, UK, Austria and Japan have smaller shadow economies than NZ. We are not so bad after all.
While at the Tax Justice Network Blog, you may be interested in reading about Tax Havens which are the way that large Multi-National Corporations avoid paying taxes. This type of loss of taxes is not mentined in the Dominion Post article. This loss of tax dollars my well be much more than the undeclared income of the Trademe Traders and other small fry tax dodgers spoken of in the article.