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Tax collectors are really good at estimating how much a business should be bringing in. Tax evasion by cash only businesses isn’t as rampant as many people think. Especially if the business sells things that require inventory. A cash only service business is more likely to be laundering money (and paying lots of taxes) than evading.

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Tax evasion is still an estimated loss of tens of billions of euros of equivalent per country every year.

https://assets.publishing.service.gov.uk/government/uploads/... https://www.dianeosis.org/en/2016/06/tax-evasion-in-greece/

And as you can see in the charts, only about 1/6 of the tax gap is evasion. Accounting mistakes, interpretation, crime, etc make up much more. As for Greece, it’s difficult to use as a good example as their government is not well organized and corruption on every level is far more common.

Of course it exists but evasion isn’t the first thing I’d think of when considering a cash only business.

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