Public Trust, Taxes and the Informal Sector

Elgin, Ceyhun; Garcia, Mario-Solis

doi:10.21773/boun.26.1.2

Cited by 10 publications

(10 citation statements)

References 25 publications

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“…17 16 Recent research provides empirical and quantitative evidence to support the negative correlation between taxes and the informal sector and attributes it to high quality institutional factors (Friedman et al, 2000) or public turnover and public trust in government (Elgin and Solis-Garcia, 2012). The appearance of the negative correlation is likely due to the failure of the analysis to identify or control for other important determinants.…”

Section: Robustness Check By Controlling For Tax Burden and For Countmentioning

confidence: 99%

Nonlinearity Between the Shadow Economy and Level of Development

Wu¹,

Schneider²

2019

IMF Working Papers

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Section: Robustness Check By Controlling For Tax Burden and For Countmentioning

confidence: 99%

Nonlinearity Between the Shadow Economy and Level of Development

Wu¹,

Schneider²

2019

IMF Working Papers

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“…Endogenizing the government's decision in an optimal taxation framework would not change our results qualitatively. (SeeElgin, 2010 andElgin andSolis-Garcia, 2012. …”

mentioning

confidence: 99%

Institutions, Informal Economy, and Economic Development

Elgin

Oztunali

2014

Emerging Markets Finance and Trade

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Using crosscountry panel data we examine the evolution of the informal economy through the course of economic development by particularly taking its relationship with institutions into account. We borrow from the informal economy estimates constructed by Elgin and Oztunali (2012) for 141 countries over the period from 1984 to 2009 and using panel data estimation techniques we investigate the relationship between informal economy and the level of economic development, proxied by GDP per-capita. Our findings suggest that institutional quality strongly interacts with the relationship between economic development and size of the informal economy. Specifically, we find that a higher GDP percapita is associated with a larger informal sector size in countries where the institutional quality is low. The opposite is true in countries with good institutions. These results are also in line with a two-sector dynamic general equilibrium model of the informal economy.

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“…The broad informal sector, which remains largely untaxed, is a potential source of the much needed revenue. Thus, taxing the informal economy is a possible source of government revenue, as the informal sector accounts for a significant and growing share of Gross Domestic Product (GDP) in many economies (Elgin & Solis-Garcia, 2011;Schneider & Klinglmair, 2004).…”

Section: A the Concept Of Taxation Within The Informal Sectormentioning

confidence: 99%

“…But certain vehicular tax impositions on importation will limit their use of certain inappropriate cars and will also generate adequate revenue to aid governmental operations and support the activities of transport systems. Taxing the informal economy is a possible source of government revenue, as the informal sector accounts for a significant and growing share of GDP in many economies (Elgin & Solis-Garcia, 2011;Schneider & Klinglmair, 2004).…”

Section: B Research Question Twomentioning

confidence: 99%

Taxation within the Transport Sector: A Ride-hailer and Sharing Economy Perspective

Anaman

Ahmed²

2021

afmj

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This study explored the implications of taxes on ride-hailing services in a developing economy setting and its effect on the activities of drivers who patronize such services. Using thematic analysis, the study analyzed interview responses from key participants in the ride-hailing services such as the drivers, service operators, and vehicle owners based on the sharing economy perspective. The results indicate that (1) in a broader sense the contribution of the ride-hailing service is characterized with some features such as savings in money and time, ease of stress for both drivers and passengers, and also ease of movement; (2) taxes are needful to ensure sustainable governance but these taxes ought to be equitably charged to all actors within the economy and (3) the Vehicle Income Tax is a cause of financial distress to Uber drivers due to its increasing nature. More importantly, the tax has the potential of eroding profits which makes drivers worse off. This new but genre system of transportation is gaining roots and far advancing within the Ghanaian landscape. Thus, policymakers and industry players must focus on its role within the economy and the benefits therefrom. Equally, there must be more policy initiatives to prevent overburdening the final consumer of ride-hailing services with high taxes and prices. It also suggested that subsequent studies focus on the use of a different methodology within a different or the same setting.

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Public Trust, Taxes and the Informal Sector

Cited by 10 publications

References 25 publications

Nonlinearity Between the Shadow Economy and Level of Development

Nonlinearity Between the Shadow Economy and Level of Development

Institutions, Informal Economy, and Economic Development

Taxation within the Transport Sector: A Ride-hailer and Sharing Economy Perspective

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