Cashless payments and tax evasion

Immordino, Giovanni; Russo, Francesco Flaviano

doi:10.1016/j.ejpoleco.2017.11.001

Cited by 66 publications

(43 citation statements)

References 31 publications

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“…Accordingly, the relevant international literature also contains numerous, often contradicting research results. Using data from multiple US states, Wright et al (2017) come to the conclusion that moving social welfare and allowances to an electronic basis considerably reduced the rate of break-ins, thefts and street crime, while Immordino -Russo (2018) show significant correlation between tax avoidance (primarily meaning VAT fraud) and bank card use. Importantly, however, according to the authors the use of cards for payment purposes is linked to the reduction of tax avoidance, while cash withdrawals from ATMs show an opposite correlation.…”

Section: Cash In the Shadow Economymentioning

confidence: 99%

Comparative Analysis of the Changes in Cash Demand in Hungary

Végső¹

2020

Financial and Economic Review

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The strong growth of cash in circulation in Hungary seen in recent years seemingly contradicts the changes in payment habits and can also be interpreted to show that the development of the Hungarian payment system is falling behind relative to other countries in Europe. Placing the Hungarian data in an international context, this study attempts to provide a true and accurate picture of the situation with cash usage in Hungary and uses the relevant literature to present the trends in cash demand observed globally. One important conclusion is that, in terms of their nature, transactional cash demand and cash demand for savings purposes are clearly separated, with the latter primarily responsible for the expansion of the volume of cash on a global scale. While the growth seen in Hungary may be high in European comparison, taking into consideration changes in interest rate levels and GDP it cannot be seen as extreme. Based on international trends, the realistic goal for Hungary should primarily be to decelerate the expansion, as experiences show that a nominal decrease in cash volume requires the long-term and concurrent existence of several factors.

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Section: Cash In the Shadow Economymentioning

confidence: 99%

Comparative Analysis of the Changes in Cash Demand in Hungary

Végső¹

2020

Financial and Economic Review

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“…For instance, in a public policy research body that advocates for the end of cash, Rogoff (2014Rogoff ( , 2017 argues that the anonymity feature of paper currency is used to hide transactions from governments and regulators, observing that in excess of 50 % of the currency worldwide is used with such aim. 4 An empirical validation for this proposition is provided by (Immordino and Russo, 2017), who analyzed the relationship between VAT evasion and payment media in Europe. They use a panel technique with data from the European Central Bank Payment Statistics and VAT gap estimations for 25 European countries during the 2000-2012 period, finding a negative relationship between VAT evasion and payment with card (debit or credit).…”

Section: Literature Review On Crime and Moneymentioning

confidence: 99%

A Model of the Indirect Effect of Crime on the Demand for Money

Rodríguez-Reyes

2018

REMEF

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This paper studies the indirect relation between the demand for money and crime, which emerges from the defensive actions of companies against criminal clients. A theoretical search model is built in which companies trade with criminal clients who consume without paying, allowing the former to hire private security. The model produces two balances in pure strategies. First, if the cost of security is high, companies do not hire private security and the criminal buyers do not carry money. Second, if the cost of security is low, the high demand for money is reestablished. This construct is formalized in a purely theoretical model that generates proposals that can be proven empirically, establishing a future line of research. It should be noted that the indirect effect described has not been discussed in relevant literature. As a result, the existence of an indirect channel between crime and money that emerges from a market externality is demonstrated: the demand of companies for private security endogenously determines the demand for money of the economy.

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“…Finally, the traceability and transparency of non-cash transactions limit illicit transactions and help in hampering the development of the illegal and underground economy (Immordino and Russo, 2018).…”

Section: Introductionmentioning

confidence: 99%

Regional Differences in Retail Payment Habits in Italy

et al. 2020

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Economic operators have a number of different procedures and instruments for regulating their cashless monetary transactions safely and quickly. Nevertheless, divergences in the use of non-cash payment instruments persist among European countries and, in Italy, between the Centre and North and the southern regions. In this paper, we study which factors are associated with the backwardness of South and Islands in the use of non-cash payment instruments. We focus on the period 2013-18, when there was a widespread increase in noncash transactions among the main advanced economies, spurred by technological innovation and the new legal framework supporting security, efficiency and transparency in digital payments. We find that the main factors associated with a lower demand for cash are technological innovation in payments and the population's digital skills and education levels; criminality and tax evasion are also significantly and positively correlated to the use of cash, but their correlations with the observed heterogeneity among Italian provinces are not predominant.

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Cashless payments and tax evasion

Cited by 66 publications

References 31 publications

Comparative Analysis of the Changes in Cash Demand in Hungary

Comparative Analysis of the Changes in Cash Demand in Hungary

A Model of the Indirect Effect of Crime on the Demand for Money

Regional Differences in Retail Payment Habits in Italy

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