The legal framework for the shadow economy in the European Union

Bitzenis, Aristidis; Vlachos, Vasileios; Skiadas, Dimitrios

doi:10.1504/ijdipe.2016.081215

Cited by 10 publications

(4 citation statements)

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“…The income or the transactions taking should have been taxable but are not presented to tax authorities. Shadow economy is generally difficult to measure and attempt to measure it using different methodologies (Medina and Schneider, 2018; Hashimzade and Heady, 2016; Schneider, 2005; Bitzenis et al , 2016) has resulted in varying results. Gomis-Porqueras et al (2014) opine that shadow economy is any cash transactions done solely to evade levied taxes.…”

Section: Overview Of Shadow Economy In Africamentioning

confidence: 99%

Shadow economy, institutions and environmental pollution: insights from Africa

Dada

Ajide

Sharimakin³

2021

WJSTSD

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PurposeThis study investigates the effect of shadow economy on environmental pollution and the role of institutional quality in moderating the impact in African countries between 1991 and 2015.Design/methodology/approachThe study employs three pollutant variables namely: carbon dioxide emissions per capita, methane emission and nitrous oxide emission as robustness check. Also, battery of methodologies; ordinary least squares, fixed effects and system generalised method of moments are used to drive out the conclusions of this study.FindingsThe findings reveal that shadow economy and institutional quality contribute significantly to environmental pollution in Africa. Further, the interactive effect of shadow economy and institutional quality worsens environmental quality in the region. This reveals that weak institutional quality recorded in the region increases the level of shadow economy, thereby intensifying environmental pollution.Practical implicationsThe study concludes that weak institutional framework in the region reinforces shadow economy and environmental pollution. Hence, findings from this study can help policymakers in the region to better understand the role of institutional quality in reducing shadow economy and environmental pollution.Originality/valueThis study enriches one’s understanding on the role of institutional quality in the relationship between environmental quality and shadow economy in African context. It investigates the direct and indirect impact of institutions and shadow economy on environmental quality. The study also uses three different robust variables to measure environmental pollution (carbon dioxide (CO2) emissions per capita, methane emission and nitrous oxide emission) for sensitivity analysis.

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Section: Overview Of Shadow Economy In Africamentioning

confidence: 99%

Shadow economy, institutions and environmental pollution: insights from Africa

Dada

Ajide

Sharimakin³

2021

WJSTSD

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“…Generally, the shadow economy is always regarded as illegal economic activity. Based on this, the shadow economy is always difficult to measure because the perpetrators normally hide it (Bitzenis et al, 2018;Medina and Schneider, 2018;Ajide et al, 2021). The shadow economy has become part of the economic activities of both developed and developing countries, with developing countries having a larger percentage.…”

Section: Stylized Fact On Shadow Economy In Africamentioning

confidence: 99%

Section: Stylized Fact On Shadow Economy In Africamentioning

confidence: 99%

Globalization and shadow economy: a panel analysis for Africa

Ajide,

Dada

2023

REPS

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PurposeThe study's objective is to examine the relevance of globalization in affecting the size of the shadow economy in selected African nations.Design/methodology/approachTo do this, the authors employ the KOF globalization index and implement both static and dynamic common correlated mean group estimators on a panel of 24 African nations from 1995–2017. This technique accommodates the issue of cross-sectional dependence, sample bias and endogenous regressors. Panel threshold analysis is also conducted to establish the nonlinearity between globalization and the shadow economy. To examine the causality between the variables, the study employs Dumitrescu and Hurlin's panel causality test.FindingsThe results show that globalization reduces the size of the shadow economy. The results of the nonlinear analysis suggest a U-shaped relationship. Overall globalization has a threshold impact of 48.837%, economic globalization has 45.615% and political globalization has 66.661% while social globalization has a threshold value of 35.744%. The results of the panel causality show that there is a bidirectional causality between the two variables.Practical implicationsThe results suggest that the government and other relevant authorities need to introduce capital controls and other policy measures to moderate the degree of social, political and cultural diffusion. Appropriate policies should be formulated to monitor the extent of African economic openness to other continents to maximize the gains from globalization.Originality/valueApart from being the first study in the African region that evaluates the relevance of globalization in controlling the shadow economy, it also analyzes the dynamics and threshold analysis between the two variables using advanced panel econometrics which makes the study unique. The study suggests that globalization tools are useful for affecting the size of the shadow economy in Africa. This study provides fresh empirical evidence on the impact of globalization on the shadow economy in the case of Africa.

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“…Kaplanoglou and Rapanos (2015) were of the opinion that low power and inadequate capacity of tax authorities as well as the low trust in government were strong drivers of low tax morale and increased tax evasion. In Greece, Bitzenis, Vlachos, and Skiadas (2016), point to a badly broken relationship between tax authorities and taxpayers due to cronyism and rent seeking behaviour lowering the levels of tax morale and cooperation resulting in increased levels of tax evasion. In Cameroon, using interviews with the informal sector operators, Dickerson (2014) found out that the relationship between tax authorities and taxpayers as far from being amicable and communication from tax authorities to taxpayers as "negligent and at the worst, contemptuous and systematically incorrect".…”

Section: Synergistic Relationship Between Government and Taxpayersmentioning

confidence: 99%

The Informal Sector, the “implicit” Social Contract, the Willingness to Pay Taxes and Tax Compliance in Zimbabwe

Mpofu

2021

Accounting, Economics, and Law: A Convivium

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The growth of the informal sector in African countries has largely been viewed as an escape from regulation and deliberate intention to avoid paying taxes and these views have been widely popularised, ignoring significant details to the disadvantage of realistic tax policy design. Zimbabwe adopted a presumptive tax system for various informal sector categories to enlarge the tax base and increase tax revenues mobilised. However, presumptive taxes have not generated significant revenue. Tax compliance in the informal sector has often been studied from the tax structure design, the deterrence model perspective and capacity limitations without paying adequate attention to tax morale. Tax morale can be denoted through the peer effect of the compliance behaviour of other taxpayers, the fulfilment of the psychological social contract, transparency and accountability in the use of tax revenues as well as stakeholder communication, built on mutual trust and respect. In light of these tax morale dimensions, it is evident that tax compliance can never be divorced from the intrinsic motivation to pay taxes. The inextricable link, between tax evasion, tax compliance and tax morale, motivates this study. While previous studies on tax morale have applied single method research approaches, this study adopted a sequential exploratory mixed method research design, combining both qualitative and quantitative (through the use of document reviews, semi-structured interviews and questionnaires) in order to bring a balanced view. The study found out that tax morale was a strong driver of tax evasion and non-tax compliance in the informal sector.

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The legal framework for the shadow economy in the European Union

Cited by 10 publications

References 0 publications

Shadow economy, institutions and environmental pollution: insights from Africa

Shadow economy, institutions and environmental pollution: insights from Africa

Globalization and shadow economy: a panel analysis for Africa

The Informal Sector, the “implicit” Social Contract, the Willingness to Pay Taxes and Tax Compliance in Zimbabwe

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