The functioning of the tax system and taxation in one economy is of crucial importance to overall financial stability, and tax evasion is one of the major risks, if not addressed adequately, and, depending on the amount of taxes evaded, can trigger severe financial instability in a country. Today, many countries are faced with the problem of tax evasion and reports of tax evasion multiply by the day. No tax system is immune to tax evasion, the only difference is the methods of tax evasion in different tax systems. Many and diverse factors, both subjective and objective, affect tax evasion as they are intertwined and determined and mutually connected and complementary. Tax evasion has multiplicative effects, it destroys the reputation of institutions primarily and in particular the reputation of the tax administration, it poses a threat to the tax system and rule of law, causing taxpayers’ distrust of the tax system itself. Thus, by reducing tax evasion the situation in public finances improves substantially. Recognition of the existing key factors of tax evasion or research into the existence of others just as, if not more important factors, de facto confirms how complex, important and current this issue is.
Model for determining subjective and objective factors of tax evasion
