Falling Tax Evasion: How Much Can Tax Rates and Labor Regulations Explain?
10 Pages Posted: 10 Feb 2008
Date Written: February 1, 2008
The study examines if recent reforms in taxation and labor regulations in several transition and developing countries contributed to the observed decline in tax evasion. It uses the Business Environment and Economic Performance Survey, a unified firm survey in 33 countries conducted in 1999-2005. The paper finds a strong positive and statistically significant effect of various measures of taxation and regulation on sales underreporting.
Keywords: tax evasion, tax rate, flat tax, labor regulation, transition
JEL Classification: H26, H3, J08
Suggested Citation: Suggested Citation