I recall in Italy many years ago, the law required merchants to hand you a cash register receipt - supposedly to ensure there was a cash register, and it was actively tallying all sales, to ensure that sales tax (and I assume, income tax for business and owner) were being fully accounted for.
When Greece went through its economic implosion, there were plenty of articles about how tax evasion was a national sport - including a side note that property taxes went up if the home had a pool but less that a quarter of pools were on the tax rolls. Supposedly more enthusiatic tax collectors were now looking at aerial and satellite photos to count pools (so the logic was - paint the pool bottom grass-coloured).
As for contractors and cash - there was an article years ago that contractors in Quebec were comlaining that they could not compete with under-the-table types. Mariginal income tax would be in the low 40’s for a person with decent income, and contractors were services obliged to collect the Goods and Service Tax (at one time 7% now, 5%). Not sure if provincial tax applied. This put the tax portion of a contract at 50% or more for someone doing business honestly. If a job is primarily labour, an under-the-table cash deal could substantially undercut a legitimate contract.
(I note that all these government programs such as “we will pay for part of better insulating your house” tend to have the proviso “…if done by a licensed contractor…”)