Tax Burden Level Leverage on Size of the Shadow Economy, Cases of EU Countries 2003-2013

Stankevičius, Evaldas; Vasiliauskaitė, Asta

doi:10.1016/j.sbspro.2014.11.238

Cited by 19 publications

(10 citation statements)

References 4 publications

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“…According to Feld and Schneider's summary of 32 studies on the shadow economy and its causes, "increase of the tax and social security contribution burdens" was by far the most important single contributor to the increase of the shadow economy, followed by "tax morale," "quality of state institutions," and "specific labor market regulations" (2010). However, contrary to traditional thinking that the tax burden is a significant driver of the shadow economy, some scholars have presented opposing empirical research results showing that the tax burden has a negative correlation with the shadow economy (Friedman, Johnson, and Kaufmann 2000;Stankevičius and Vasiliauskaite 2014). Cumbersome labor-market restrictions, loss of access to the formal financial sector, and weak governance and institutions also determine the size of the shadow economy (Singh, Jain-Chandra, and Mohommad 2012).…”

Section: What Are the Key Characteristics Of The Shadow Economy?mentioning

confidence: 98%

Can Tax Incentives for Electronic Payments Reduce the Shadow Economy? Korea's Attempt to Reduce Underreporting in Retail Businesses

Sung¹,

Awasthi²,

Lee³

2017

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Section: What Are the Key Characteristics Of The Shadow Economy?mentioning

confidence: 98%

Can Tax Incentives for Electronic Payments Reduce the Shadow Economy? Korea's Attempt to Reduce Underreporting in Retail Businesses

Sung¹,

Awasthi²,

Lee³

2017

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“…All the authors cited agree with the idea that high income taxation has a negative impact on economic growth and countries development. Budgetary discipline and good allocation of resources by governments of the different member states are also essential to the economic and social success [23].…”

Section: The "Fiscal Gap" Between Eu Member States and How It Affectsmentioning

confidence: 99%

Globalization, fiscal policy and free competition: The impact in EU

Anjos

2021

SHS Web of Conf.

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Research background: Globalization has profoundly changed the rules of play in the international economy. A new world order, new challenges and new difficulties have arisen as well new strategies to avoid the consequences of global free competition. Fiscal policy is a crucial tool in new global competition model, in special for regions with a high level of economic integration, as EU. In this context tax harmonization is extremely important to prevent distortions of competition in European market. Purpose of the article: Study the political and institutional constraints of the tax harmonization and disclosure a small part of the initial results of a investigation project about “tax competition in EU”. Understand if and how lack of tax harmonization between the member states is one of the causes of inequity between them, in special the Euro zone countries. Methods: Comparative study about income tax’s in Euro zone countries and the relation to PIB, as well the deductive method to analyse the results we find and some reference studies on the subject. Findings & Value added: The goal is answer to the follow questions: what are the political and institutional limitations to tax harmonization in EU? Why there are no further progress in the field of tax harmonization? Can EU and Euro zone survive face a globalization challenge with the present fiscal disloyal competition between member states? What future for EU in a globalization era? Findings show that tax harmonization never was considered as a priority in EU, and maybe never will, what is a weakness in a globalization world.

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“…Other main determinants concern with the taxation regime and institutional setting. The studies by [19], [20] and [21] found that the burden of taxation is among the main determinants in the EU countries and particularly in Spain ( [22]). [23] pointed out that bureaucratic complexity also contributes to the SE.…”

Section: On the Determinants Of The Shadow Economymentioning

confidence: 99%

e-Government and the Shadow Economy: Evidence from Across the Globe

Veiga

Rohman

2017

Lecture Notes in Computer Science

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The shadow economy can be defined as economic activities that escape detection in the official estimates of the Gross Domestic Product (GDP). A larger size of the informal sector poses a significant challenge for policymaking as it reduces the reliability of official estimators and increases the likelihood of adopting ineffective policies. Furthermore, the shadow economy may also influence the allocation of resources. The phenomenon is particularly bigger in the developing world. This paper aims to investigate a possible contribution of e-Government (eGov) to mitigate the problem of the shadow economy. We argue that eGov implementation will allow the government to reduce the administrative burden costs, reduce tax evasion and allow citizens to act as whistle-blowers, all of which may eventually lower the size of the shadow activities. Since the implementation of eGov corresponds to the stage of infrastructure development in the Information and Communications Technologies (ICTs), the diffusion of eGov also requires particular threshold points by which the impact can only be seen. We investigate the data of 147 countries during the period 2003-2013, where the data on estimated shadow economy (based on [1]) and eGov index (based on [2]) are both available. We found that increasing the eGov index significantly reduces the size of the shadow economy. Moreover, the marginal impact is greater in the developed and higher income countries. This sheds a light on the importance to achieve a sufficient level of critical mass in eGov infrastructure before countries are able to reap the benefits of the initiatives.

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Tax Burden Level Leverage on Size of the Shadow Economy, Cases of EU Countries 2003-2013

Cited by 19 publications

References 4 publications

Can Tax Incentives for Electronic Payments Reduce the Shadow Economy? Korea's Attempt to Reduce Underreporting in Retail Businesses

Can Tax Incentives for Electronic Payments Reduce the Shadow Economy? Korea's Attempt to Reduce Underreporting in Retail Businesses

Globalization, fiscal policy and free competition: The impact in EU

e-Government and the Shadow Economy: Evidence from Across the Globe

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