scholarly journals Estimation of the size of tax evasion in Greece

2020 ◽  
pp. 97-107
Author(s):  
Anastasiou Athanasios ◽  
Kalamara Eleni ◽  
Kalligosfyris Charalampos
Keyword(s):  
Tax Evasion ◽  
Basic Assumption ◽  
Shadow Economy ◽  
Tax Revenue ◽  
Model Estimation ◽  
Direct Response ◽  
Tax Rate ◽  
Direct Taxation ◽  
Currency Demand ◽  
The University

The purpose of this paper is to estimate the extent of tax evasion in Greece for the period 1980-2018. For this estimation we have chosen to apply an indirect method of approach to the issue, as developed by Tanzi, based on the assumption that estimating the size of the shadow economy can lead us to a safe measurement of the extent of tax evasion. More precisely, through the Currency Demand approach which is based on the basic assumption that activities under the shadow economy constitute a direct response of taxpayers to the increased tax burden and also that cash is mainly used to conduct such transactions and of the wealth derived from them, the size of the shadow economy was determined using the method of the University of Leicester research team and then the level of tax evasion was assessed by imposing an annual tax rate on it as a ratio of total tax revenue to Gross Domestic Product. The results showed a significant increase of the size of tax evasion during the period considered, while the model estimation showed that most of the tax evasion came from direct taxation.

scholarly journals The Shadow Economy of Czech Republic and Tax Evasion: The Currency Demand Approach

2016 ◽  
Vol 64 (6) ◽  
pp. 2081-2086 ◽  
Author(s):  
Dennis Nchor ◽  
Tomáš Konderla
Keyword(s):  
Czech Republic ◽  
Tax Evasion ◽  
Shadow Economy ◽  
Banking System ◽  
Tax Revenue ◽  
Velocity Of Money ◽  
Currency Demand ◽  
Currency Demand Approach ◽  
Automatic Teller Machines ◽  
Two Stages

This study investigates the shadow economy of Czech Republic and the associated losses in tax revenue. The presence of a shadow economy may not necessarily be bad for the economies in which they prevail but they could cause huge losses to government revenue and could also constitute serious violation of labour regulations. The study uses the Currency Demand Approach. It measures the size of the shadow economy in two stages: a) the econometric estimation of an aggregate money demand equation b) the calculation of the value of the shadow economy through the quantity theory of money. The key variables in the study include: the total currency held outside the banking system, the number of automatic teller machines, the deposit interest rate, GDP deflator, the average tax, velocity of money, nominal GDP and nominal money supply. The results from the study show that the shadow economy of Czech Republic on the average is about 20.9 % as at the end of 2013 and the country loses an average tax revenue of about 7.2 % of GDP yearly. The data was obtained from the World Bank country indicators and the International Financial Statistics.

scholarly journals Indirect Tax Incidence under Inelastic Underground Economy Demand

2015 ◽  
Vol 7 (3(J)) ◽  
pp. 56-62
Author(s):  
Gerasimos T. SOLDATOS
Keyword(s):  
Cash Flow ◽  
Tax Evasion ◽  
Underground Economy ◽  
Sales Tax ◽  
Tax Incidence ◽  
Tax Revenue ◽  
Usual Sense ◽  
Indirect Taxation ◽  
Direct Taxation ◽  
Structure Changes

This paper demonstrates theoretically that a profit tax does not affect the distribution of the firm’s operations between the official and the underground economy. Or, if the firm was initially operating only officially, direct taxation of its business would not be a reason to go underground. Indirect taxation in the form of a sales tax does influence an already existing mix of official and underground activities, favoring the latter. And, it does constitute a reason to “go underground” for an otherwise fully official business. This is a thesis robust to market structure changes and to introducing tax evasion in the usual sense, provided the underground demand is inelastic. The tax authority can still collect the planned tax revenue through a combination of a cash-flow tax with indirect taxation, under only consumersurplus loss by the underground customer.

Intertemporal substitution in labour supply and tax revenue use

2021 ◽  
Author(s):  
Gerasimos T. Soldatos
Keyword(s):  
Tax Evasion ◽  
Labour Supply ◽  
Tax Revenue ◽  
Tax Rates ◽  
Work Effort ◽  
Tax Rate ◽  
Transfer Payments ◽  
Pure Public Good ◽  
Wage Ratio ◽  
Tax Benefits

This article examines the response of work effort to changes in wage and/or tax rates when (1) no part of the taxes returns back to taxpaying workers, but when a part goes back (2) through the provision of a pure public good or (3) through transfer payments. The work-effort ratio is found to be higher in a Leviathan state, but the comparison between the two other tax-use regimes is uncertain. The response of the effort ratio to a change in the wage ratio follows the same pattern, while this response is weakened by a change in the current tax rate and strengthened by a change in the future tax rate, regardless not only of the use of tax revenue, but also of its change over time. In the case of change, the comparison of effort ratios is clear only when the change prompts them to move in the same direction. Corollaries related to tax evasion point to the irrelevance of tax benefits for labour supply decisions.

scholarly journals The Effect of Shadow Economy – Country'S Tax Losses

10.3846/149 ◽  
2011 ◽  
Vol 1 (3) ◽  
pp. 38-41 ◽  
Author(s):  
Jolita Krumplytė
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Tax Avoidance ◽  
Tax Revenue ◽  
Tax Administration ◽  
Tax Gap ◽  
The Difference ◽  
Consolidate Budget

The article analyzes the content of shadow economy through the prism of the tax administration. The author provides the limitations of the study and methodologically based relationship between the shadow economy and the tax revenue not to be received to the national consolidate budget. Country’s tax losses (tax gap) is the amount of the tax revenue that is not received to the country's consolidated budget in the tax non-payment effects: tax avoidance and tax evasion. Tax losses (tax gap) is treated as the difference between the amount of potential taxes and contributions that could be collected if the taxpayers correctly calculated and paid on time in accordance with the provisions of the legislation and actually paid taxes and contributions.

scholarly journals An Estimation of Tax Evasion in Iran

2011 ◽  
Vol 3 (1) ◽  
pp. 8-12 ◽  
Author(s):  
Saeed Karimi Petanlar ◽  
Ahmad Jafari Samimi . ◽  
Alireza Aminkhaki .
Keyword(s):  
Tax Evasion ◽  
Underground Economy ◽  
Effective Tax Rate ◽  
Policy Makers ◽  
Indirect Approach ◽  
Tax Rate ◽  
Term Trend ◽  
Currency Demand ◽  
Long Term Trend

The aim of this research is to estimate the size of tax evasion between 1971 and 2007 in Iran. Among the present direct and indirect approaches, the indirect approach presented by Tanzi based on currency demand, is used to estimate the size of the underground economy, then taking the effective tax rate into consideration, the amount of the underground economy taxes. Our results show that the size of the underground economy is increasing in a long-term trend and also the ratio of the underground economy to gross domestic product has increased during the period under consideration. Our findings also indicate that tax evasion has markedly increased during the period. Therefore, policies to alleviate the tax evasion in the country should be implemented by policy makers.

Well-being and inequality in comparative perspective: the case of Poland and Ukraine

2019 ◽  
pp. 32-55
Author(s):  
Natalia Kovalisko ◽  
Serhii Makeev
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Free Market ◽  
Well Being ◽  
Household Surveys ◽  
Cheap Labour ◽  
Catching Up ◽  
Public Opinion Polls ◽  
Opinion Polls

Socio-economic trajectories of Poland and Ukraine have been considerably diverging since the last decade of the 20th century. The former has been advancing and catching up with Western European countries in terms of the quality of life — whereas in Ukraine, the 1990s recession gave way to unsustainable economic growth, which interrupted in the second half of the 2000s and in the 2010s. The comparison of official statistics, along with the data of household surveys and public opinion polls, makes it possible to conclude that a progressive and sustainable transition from a command economy to free market, as exemplified by Poland, is accompanied by moderate deepening of economic inequality. However, an abnormal transition (deviating from the “Polish rule”) entails excessive concentration of wealth and gives rise to corruption as a mechanism of income redistribution among different categories of population. This also results in a more noticeable stratification of opportunies for meeting vital and existential needs. Owing to a large proportion of shadow economy and undeclared work, Ukrainians remain a source of cheap labour in both the domestic and international labour markets; in addition, a persistent subculture of tax evasion is being formed in this country.

scholarly journals Corruption, Taxation and the Impact on the Shadow Economy

Economies ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 18 ◽  
Author(s):  
Daniel Němec ◽  
Eva Kotlánová ◽  
Igor Kotlán ◽  
Zuzana Machová
Keyword(s):  
Tax Evasion ◽  
Capital Accumulation ◽  
Shadow Economy ◽  
Labour Force ◽  
Destructive Effect ◽  
Eu Member States ◽  
Initial Assumption ◽  
The Individual ◽  
The Impact

While assessing the economic impacts of corruption, the corruption-related transmission channels which influence taxation as such have to be duly considered. Taking the example of the Czech Republic, this article aims to evaluate the impacts corruption has on the size of the shadow economy as well as on the individual sources of long-term economic growth, making use of a transmission channel through which corruption affects the tax burden components. Using the method of an extended DSGE model, it confirms the initial assumption that an increase in perceived corruption supports the shadow economy’s growth, but at the same time, it demonstrates that corruption and especially its perception has a significantly different effect on two key areas—the capital accumulation and the labour force size. It further identifies another sector of the economy representing taxes which are prone to tax evasion while asserting that corruption has a much more destructive effect on this sector of the economy, offering generalized implications for other post-communist EU member states in a similar situation.

scholarly journals Governmental Taxation of Households Choosing between a National Currency and a Cryptocurrency

Games ◽  
2021 ◽  
Vol 12 (2) ◽  
pp. 34
Author(s):  
Guizhou Wang ◽  
Kjell Hausken
Keyword(s):  
Central Bank ◽  
Tax Evasion ◽  
National Currency ◽  
Tax Rate ◽  
Digital Currency ◽  
Output Elasticity ◽  
Penalty Factor ◽  
The Government ◽  
Parameter Values ◽  
High Output

: A game between a representative household and a government was analyzed. The household chose which fractions of two currencies to hold, e.g., a national currency such as a Central Bank Digital Currency (CBDC) and a global currency such as Bitcoin or Facebook’s Diem, and chose the tax evasion probability for each currency. The government chose, for each currency, the probability of detecting and prosecuting tax evasion, the tax rate, and the penalty factor imposed on the household when tax evasion was successfully detected and prosecuted. The household′s fraction of the national currency, the government’s monitoring probability of the national currency, and the penalty factor imposed on the global currency, increased in the household′s Cobb Douglas output elasticity for the national currency. The household′s probabilities of tax evasion on both currencies increased in the government’s Cobb Douglas output elasticity for the national currency. The government’s taxation on both currencies decreased in the output elasticity for the national currency. High output elasticity for the national currency eventually induced the government to tax that currency more than the global currency. The household′s probability of tax evasion on the global currency increased in the government’s output elasticity for that currency. The household was less (more) likely to tax evade on the national (global) currency if the government valued taxation and penalty on the national (global) currency. The results are illustrated numerically where each of the eight parameter values were varied relative to a benchmark.

Sign in / Sign up

Export Citation Format

Share Document