Tax Evasion and Financial Instability

Journal of Financial Crime, Forthcoming

11 Pages Posted: 14 Aug 2018 Last revised: 22 Jan 2020

See all articles by Peterson K Ozili

Peterson K Ozili

Central Bank of Nigeria; Central Bank of Nigeria

Date Written: 2020


This study explores the association between tax evasion and financial instability. The discussion also examines the effect of tax evasion for financial instability. The discussion shows that tax evasion can reduce the tax revenue available to governments to manage the economy, and to weaken its ability to promote stability in financial systems, while on the other hand, taxpayers who evade taxes feel they can use the evaded tax money to rather improve their own financial stability.

Keywords: Tax, Tax evasion, financial stability, financial crisis, tax avoidance

JEL Classification: G21, G28

Suggested Citation

Ozili, Peterson K, Tax Evasion and Financial Instability (2020). Journal of Financial Crime, Forthcoming. Available at SSRN:

Peterson K Ozili (Contact Author)

Central Bank of Nigeria ( email )

Plot 33, Abubakar Tafawa Balewa Way
Central Business District, Cadastral Zone

Central Bank of Nigeria ( email )

Abuja, 09

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