scholarly journals The Shadow Economy of Czech Republic and Tax Evasion: The Currency Demand Approach

2016 ◽  
Vol 64 (6) ◽  
pp. 2081-2086 ◽  
Author(s):  
Dennis Nchor ◽  
Tomáš Konderla
Keyword(s):  
Czech Republic ◽  
Tax Evasion ◽  
Shadow Economy ◽  
Banking System ◽  
Tax Revenue ◽  
Velocity Of Money ◽  
Currency Demand ◽  
Currency Demand Approach ◽  
Automatic Teller Machines ◽  
Two Stages

This study investigates the shadow economy of Czech Republic and the associated losses in tax revenue. The presence of a shadow economy may not necessarily be bad for the economies in which they prevail but they could cause huge losses to government revenue and could also constitute serious violation of labour regulations. The study uses the Currency Demand Approach. It measures the size of the shadow economy in two stages: a) the econometric estimation of an aggregate money demand equation b) the calculation of the value of the shadow economy through the quantity theory of money. The key variables in the study include: the total currency held outside the banking system, the number of automatic teller machines, the deposit interest rate, GDP deflator, the average tax, velocity of money, nominal GDP and nominal money supply. The results from the study show that the shadow economy of Czech Republic on the average is about 20.9 % as at the end of 2013 and the country loses an average tax revenue of about 7.2 % of GDP yearly. The data was obtained from the World Bank country indicators and the International Financial Statistics.

scholarly journals Estimation of the size of tax evasion in Greece

2020 ◽  
pp. 97-107
Author(s):  
Anastasiou Athanasios ◽  
Kalamara Eleni ◽  
Kalligosfyris Charalampos
Keyword(s):  
Tax Evasion ◽  
Basic Assumption ◽  
Shadow Economy ◽  
Tax Revenue ◽  
Model Estimation ◽  
Direct Response ◽  
Tax Rate ◽  
Direct Taxation ◽  
Currency Demand ◽  
The University

The purpose of this paper is to estimate the extent of tax evasion in Greece for the period 1980-2018. For this estimation we have chosen to apply an indirect method of approach to the issue, as developed by Tanzi, based on the assumption that estimating the size of the shadow economy can lead us to a safe measurement of the extent of tax evasion. More precisely, through the Currency Demand approach which is based on the basic assumption that activities under the shadow economy constitute a direct response of taxpayers to the increased tax burden and also that cash is mainly used to conduct such transactions and of the wealth derived from them, the size of the shadow economy was determined using the method of the University of Leicester research team and then the level of tax evasion was assessed by imposing an annual tax rate on it as a ratio of total tax revenue to Gross Domestic Product. The results showed a significant increase of the size of tax evasion during the period considered, while the model estimation showed that most of the tax evasion came from direct taxation.

Reply to Gebhard Kirchgässner

2017 ◽  
Vol 18 (1) ◽  
pp. 112-131 ◽  
Author(s):  
Lars P. Feld ◽  
Friedrich Schneider
Keyword(s):  
Potential Role ◽  
Shadow Economy ◽  
Survey Method ◽  
Double Counting ◽  
Advantages And Disadvantages ◽  
Currency Demand ◽  
Currency Demand Approach ◽  
Mimic Approach

Abstract In this reply to Kirchgässner, four issues are addressed: (1) the extent of double counting in attempts to reconcile estimates of the shadow economy based on the survey method and estimates based on the MIMIC (cum currency demand) approach, (2) advantages and disadvantages of the survey method, (3) of macro methods like the MIMIC approach and (4) the potential role of plausibility checks of estimates from the MIMIC approach with the survey method.

scholarly journals The Shadow Economy in Colombia: Size and Effects on Economic Growth

2014 ◽  
Vol 20 (2) ◽  
pp. 293-325 ◽  
Author(s):  
Friedrich Schneider ◽  
Bettina Hametner
Keyword(s):  
Economic Activity ◽  
Shadow Economy ◽  
Indirect Taxation ◽  
Average Growth ◽  
Percentage Points ◽  
Negative Effect ◽  
Currency Demand ◽  
Per Capita ◽  
Currency Demand Approach ◽  
Over Time

AbstractUsing the currency demand approach, size and development of Colombia’s shadow economy are estimated over the period from 1980 to 2012. The results show a great extent of shadow economic activity varying over time between 27 and 56% of GDP. The most important factors driving the shadow economy are indirect taxation and unemployment. Analyzing the interaction between shadow and official economy, the shadow economy has a negative effect on the official one. Average growth of real per capita GDP is 1.86% between 1980 and 2012, without shadow economy it would have been higher around 0.12 percentage points on average.

scholarly journals The Effect of Shadow Economy – Country'S Tax Losses

10.3846/149 ◽  
2011 ◽  
Vol 1 (3) ◽  
pp. 38-41 ◽  
Author(s):  
Jolita Krumplytė
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Tax Avoidance ◽  
Tax Revenue ◽  
Tax Administration ◽  
Tax Gap ◽  
The Difference ◽  
Consolidate Budget

The article analyzes the content of shadow economy through the prism of the tax administration. The author provides the limitations of the study and methodologically based relationship between the shadow economy and the tax revenue not to be received to the national consolidate budget. Country’s tax losses (tax gap) is the amount of the tax revenue that is not received to the country's consolidated budget in the tax non-payment effects: tax avoidance and tax evasion. Tax losses (tax gap) is treated as the difference between the amount of potential taxes and contributions that could be collected if the taxpayers correctly calculated and paid on time in accordance with the provisions of the legislation and actually paid taxes and contributions.

scholarly journals Shadow economies and tax evasion: The case of the Czech Republic, Poland and Hungary

2020 ◽  
Author(s):  
Dennis Nchor
Keyword(s):  
Czech Republic ◽  
Tax Evasion ◽  
Time Series Data ◽  
Series Data ◽  
Tax Revenue ◽  
Economic Activities ◽  
The Czech Republic ◽  
Goods And Services ◽  
Shadow Economies ◽  
Average Size

AbstractThis paper examines the drivers and the size of the shadow economies of the Czech Republic, Hungary and Poland. It also investigates the tax losses associated with these shadow economic activities in all three countries. The Multiple Indicators and Multiple Causes (MIMIC) model is applied and uses time series data covering the period 1990–2019. The key findings show that the sizes of the shadow economies of the Czech Republic, Hungary and Poland are 10.44, 11.18 and 20.47% respectively. The results also show that the average size of the shadow economies between 1990–2019 was 14.92% in the Czech Republic, 18.72% in Hungary and 22.85% in Poland. The Czech Republic loses 3.13% of tax revenue from goods and services and 2.83% from incomes and profits as a result of the shadow economy, while Hungary loses 5.05% of tax revenue from goods and services and 1.68% from incomes and profits. Poland loses 5.25% of tax revenue from goods and services and 4.34% from incomes and profits.

scholarly journals On Estimating the Size of the Shadow Economy

2017 ◽  
Vol 18 (1) ◽  
pp. 99-111 ◽  
Author(s):  
Gebhard Kirchgässner
Keyword(s):  
Shadow Economy ◽  
Survey Method ◽  
Currency Demand ◽  
Currency Demand Approach ◽  
Model Approach

Abstract As long as it is employed cautiously enough, the model approach is a useful tool to estimate simultaneously the size and the development of the shadow economy in several countries. However, a second method is necessary to calibrate the model. The currency demand approach can lead to highly implausible results; the size of the shadow economy might be largely overestimated. An alternative is the survey method. For real tests of whether a variable has an impact, procedures are necessary that do not use the same variables as those used to construct the indicator. Thus, to make progress in analysing the shadow economy, the model approach has a role to play, but it has to be complemented by other methods employing different data. The currency demand approach cannot be used as long as it employs the same variables for its constructions.

Well-being and inequality in comparative perspective: the case of Poland and Ukraine

2019 ◽  
pp. 32-55
Author(s):  
Natalia Kovalisko ◽  
Serhii Makeev
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Free Market ◽  
Well Being ◽  
Household Surveys ◽  
Cheap Labour ◽  
Catching Up ◽  
Public Opinion Polls ◽  
Opinion Polls

Socio-economic trajectories of Poland and Ukraine have been considerably diverging since the last decade of the 20th century. The former has been advancing and catching up with Western European countries in terms of the quality of life — whereas in Ukraine, the 1990s recession gave way to unsustainable economic growth, which interrupted in the second half of the 2000s and in the 2010s. The comparison of official statistics, along with the data of household surveys and public opinion polls, makes it possible to conclude that a progressive and sustainable transition from a command economy to free market, as exemplified by Poland, is accompanied by moderate deepening of economic inequality. However, an abnormal transition (deviating from the “Polish rule”) entails excessive concentration of wealth and gives rise to corruption as a mechanism of income redistribution among different categories of population. This also results in a more noticeable stratification of opportunies for meeting vital and existential needs. Owing to a large proportion of shadow economy and undeclared work, Ukrainians remain a source of cheap labour in both the domestic and international labour markets; in addition, a persistent subculture of tax evasion is being formed in this country.

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