scholarly journals Currency Demand, the Underground Economy, and Tax Evasion: The Case of Guyana

2003 ◽  
Vol 03 (7) ◽  
pp. 1 ◽  
Author(s):  
Ebrima Faal ◽  
Keyword(s):  
Tax Evasion ◽  
Underground Economy ◽  
Currency Demand

Estimating the underground economy, illegal money and tax evasion in Qatar

2019 ◽  
Vol 26 (4) ◽  
pp. 1048-1064 ◽  
Author(s):  
Awadh Ahmed Mohammed Gamal ◽  
Jauhari Dahalan ◽  
K. Kuperan Viswanathan
Keyword(s):  
Tax Evasion ◽  
Banking Sector ◽  
Demand Function ◽  
Unit Root Test ◽  
Underground Economy ◽  
Average Level ◽  
Economic Activities ◽  
Content Type ◽  
Currency Demand ◽  
The Government

Purpose Up to now a country-specific study on Qatar with respect to underground economy, illegal money and tax evasion has not been undertaken. This paper aims to contribute by separately estimating the magnitude of the underground economy in Qatar from 1980 to 2010 using adjusted currency demand function. Design/methodology/approach The study uses the Zivot–Andrews unit root test for the stationarity analysis and applies the Gregory and Hansen long run cointegrating technique for estimating the underground economy based on the latest form of the currency demand function model. While the general to specific technique is used to estimate the short run error correction model. Findings The results show that the average size of the underground economy in Qatar is about 17.03 per cent of the official gross domestic products (GDPs). The average level of tax evasion as a per cent of the total non-oil tax revenues is estimated at around 16.50 per cent and is about 2.12 per cent of the official GDP. The average level of illegal money to the total money from banking sector is estimated at 26.70 per cent. Originality/value This study is the first to separately estimate the extent of the underground economy, illegal currency and tax evasion in Qatar. It overcomes the methodological errors and spurious estimation problems encountered in the previous studies that included Qatar with other countries based on cross-country data without taking into consideration the economic differences between countries. The authors believe that the findings may help the government of Qatar to re-formulate its economic policies, thus, enabling it to curb the growing underground economic activities.

An estimation of the underground economy and tax evasion

2019 ◽  
Vol 22 (4) ◽  
pp. 626-645
Author(s):  
John Kwaku Amoh ◽  
Babonyire Adafula
Keyword(s):  
Tax Evasion ◽  
Time Series Data ◽  
Underground Economy ◽  
Series Data ◽  
Demand Model ◽  
Current Form ◽  
Content Type ◽  
Mobile Money ◽  
Distributed Lag ◽  
Currency Demand

PurposeThis paper aims to use an econometric model to estimate tax evasion from the size of the underground economy and examined the factors that trigger it.Design/methodology/approachThe study used time series data sourced from world development indicators and Bank of Ghana covering the period 1990-2015 to estimate tax evasion from the underground economy using an autoregressive distributed lag model drawing on the currency demand approach.FindingsThe results confirmed the existence of a large underground economy and a high incidence of tax evasion in Ghana. The Ghanaian situation has been aggravated by an underground economy-triggering factor of mobile money activities, which increased by 83.1 per cent in 2015. Tax evasion averaged 20.78 per cent of GDP over the period. The study, thus, concludes that the increased number of mobile money activities, high tax burden and unemployment contribute to the worsening of the tax evasion problem in Ghana.Originality/valueThe study is one of the premier attempts to introduce electricity power consumption variables in the currency demand model to estimate tax evasion from the size of the underground economy. The authors hypothesize that the emergence of mobile money activities in its current form triggers underground and tax-evading activities. The study, thus, calls for the formalization and regulation of the operations of mobile money activities in emerging economies as a way of managing the underground economy, which incubates tax evasion.

Measuring the Underground Economy and its Impact on the Economy of Pakistan

2004 ◽  
Vol 9 (2) ◽  
pp. 93-103 ◽  
Author(s):  
Bushra Yasmin ◽  
Hira Rauf
Keyword(s):  
Tax Evasion ◽  
Underground Economy ◽  
Least Square ◽  
Demand Equation ◽  
Ordinary Least Square ◽  
Economic Problems ◽  
Time Period ◽  
Monetary Approach ◽  
Currency Demand ◽  
The Impact

This study focuses on the measurement of the underground economy (UGE) through tax evasion in Pakistan over the time period 1974-2002. The monetary approach is applied in order to estimate the underground economy. First, the currency demand equation is estimated and then an attempt is made to deduce the size of the underground economy and tax evasion. Finally, an Ordinary Least Square (OLS) Model is applied in order to estimate the impact of the underground economy on Gross Domestic Product of Pakistan for a selected time period. The results demonstrated that the underground economy has increased enormously from Rs. 12 billion in 1974 to Rs. 1085 billion in 2002. The findings suggest that the existence of such a large UGE can decrease tax revenues, depress GDP, and raise socio-economic problems. Frequent tax audits and heavier penalties for tax evasion may minimise the size of the underground economy with its ill effects.

Estimating the size of the Cypriot underground economy

2006 ◽  
Vol 27 (6) ◽  
pp. 515-534 ◽  
Author(s):  
Meryem Duygun Fethi ◽  
Sami Fethi ◽  
Salih Turan Katircioglu
Keyword(s):  
Tax Evasion ◽  
Design Methodology ◽  
Underground Economy ◽  
Annual Data ◽  
Time Intervals ◽  
Content Type ◽  
Average Ratio ◽  
European Experience ◽  
Currency Demand ◽  
Practical Implications

PurposeTo measure the size of underground economy and the amount of tax evasion in Cyprus by employing monetary and non‐monetary approaches over the period 1960‐2003 and to compare the Cyprus figures with some European experience existing in the literature.Design/methodology/approachAnnual data covering the 1960‐2003 period were applied to several approaches for measuring the size of underground economy and the amount of tax evasion in Cyprus. These approaches are: employment discrepancy; simple currency ratio; transaction and currency demand.FindingsOn the basis of the results obtained from this study: firstly, in Cyprus the average ratio of the underground economy and tax evasion to official GDP is estimated at 9.41 and 0.31 percent of GDP respectively for the study period, and secondly, in the two time intervals where Cypriots figures are internationally comparable with the often quoted EU underground economy figures, the figures for Cyprus are estimated as 5.96 percent of GDP in 1994‐95 and 5.67 percent of GDP in 1996‐97 whereas the figures for some European Union (EU) members are 18.05 percent of GDP in 1994‐95 and 18.76 percent of GDP in 1996‐97.Research limitations/implicationsFindings of this study suggest that the issue of the underground economy is still in need of further investigation, firstly, to reach reliable results since each approach has its own strengths and weaknesses and yield different results, secondly, to find out the best method selection on a well‐established theory, and finally, to employ reliable data estimating measurement.Practical implicationsBoth EU and Cypriot authorities can utilize this study to analyse the extent of Cypriot underground economy with respect to the other EU members. Such attempts can be useful in developing policies and implementing actions and measures to eliminate underground economy activities.Originality/valueThis study is the first of its kind with recent data to measure the size of underground economy and tax evasion for the Cypriot economy by employing various approaches.

scholarly journals An Estimation of Tax Evasion in Iran

2011 ◽  
Vol 3 (1) ◽  
pp. 8-12 ◽  
Author(s):  
Saeed Karimi Petanlar ◽  
Ahmad Jafari Samimi . ◽  
Alireza Aminkhaki .
Keyword(s):  
Tax Evasion ◽  
Underground Economy ◽  
Effective Tax Rate ◽  
Policy Makers ◽  
Indirect Approach ◽  
Tax Rate ◽  
Term Trend ◽  
Currency Demand ◽  
Long Term Trend

The aim of this research is to estimate the size of tax evasion between 1971 and 2007 in Iran. Among the present direct and indirect approaches, the indirect approach presented by Tanzi based on currency demand, is used to estimate the size of the underground economy, then taking the effective tax rate into consideration, the amount of the underground economy taxes. Our results show that the size of the underground economy is increasing in a long-term trend and also the ratio of the underground economy to gross domestic product has increased during the period under consideration. Our findings also indicate that tax evasion has markedly increased during the period. Therefore, policies to alleviate the tax evasion in the country should be implemented by policy makers.

scholarly journals IF IT IS THE TOPIC OF THE RESEARCH OF THE INFORMAL ECONOMY

2018 ◽  
Author(s):  
Ionel BOSTAN
Keyword(s):  
Informal Economy ◽  
Tax Evasion ◽  
Publishing House ◽  
Underground Economy ◽  
Measurement Issues ◽  
Journalistic Field

21 years ago I published the book Informal Economic Environments, published at the BIT Publishing House (Iasi, RO), which addressed what we considered then to be the underground economy. At that moment it was appreciated that the approach was harsh, given that "recognized personalities in the economic or journalistic field have approached such problems only in a sequential manner" (V. Codreanu, in the Preface). The same precursor notes that "Approaching the mechanisms of the underground economy and understanding their functioning is not intended to ensure its removal (perhaps, at most, its limitation), but will certainly make it easier to obtain more realistic assessments and knowledge of several aspects of it". With the sources of documentation at that time, we dealt with issues such as the identification elements of the informal economy, an overview of it, the measurement issues and the magnitude (in Romania and worldwide). When I approached the Fraud and Tax Evasion, I made a presentation of it, while also presenting the existing motivations and the extent.

scholarly journals Study On Budget Revenue Collection, Shadow Economy and Tax Losses Caused By It

2017 ◽  
Vol 27 (2) ◽  
pp. 1-18 ◽  
Author(s):  
Claudia Florina Radu ◽  
Florin Cornel Dumiter ◽  
Lavinia Dudas ◽  
Stefania Master Jimon
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Tax Avoidance ◽  
Underground Economy ◽  
Tax Burden ◽  
Revenue Collection ◽  
The Law ◽  
Necessary Evil ◽  
Budget Revenue

Abstract Tax avoidance is a phenomenon faced by all countries, to a lesser or greater extent, and we can say that it has begun to manifest itself since the introduction of taxes. It is known that generally taxes are not pleasing to taxpayers, especially when their level is high. However, it is important for individuals, as a whole, not to evade from their tax obligations. In this context taxes can be regarded as a necessary evil to ensure the resources needed for state functioning. But often some taxpayers are looking for ways to avoid taxes, engaging either in tax evasion to the shelter of the law or in fraudulent evasion. In this paper we present some of the aspects that motivate individuals to pay taxes. Also we analyze the situation of budgetary revenues in Alba County and also the evolution of the main income of consolidated general budget in Romania. In the end of the paper we intend to draw a parallel between shadow economy, tax burden and tax losses due to shadow economy for a sample of 32 countries. In this way we can see where underground economy and tax losses have the highest values and where are required measures to mitigate them.

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