Abstract
This chapter targets the estimation of the impact of fiscal pressure upon tax frauds, through a linear and parametric approach on panel data as well. For this purpose, we use a sample consisting of 38 OECD countries for the period 2005–2020, which is divided into two subgroups of countries (old countries (old) and new ones (new)). Our results confirm the existence of the Laffer curve (having a U-shape) for the majority of our results, except for the social and security contributions for the all and old OECD samples, and direct taxes for the new OECD sample. Then, we find that the level of resilience of new OECD countries is below that of old OECD countries. In addition, the form of the relationship differs between old and new countries, while the highest disparity in the form of the relationship regarding shadow economy is found for direct taxes. All our results are interpreted in detail and their policy implications are discussed as well. The limits of this study leave avenue for future research in the field: different tax fraud proxies, supplementary control variables, other multivariate data techniques.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Achim MV, Borlea NS (2020) Economic and financial crime. Corruption, shadow economy and money laundering. Springer, Cham
Achim MV, Borlea NS, Anghelina A (2018a) The impact of fiscal policies on corruption: A panel analysis. S Afr J Econ Manag Sci 21(1):1–9. https://doi.org/10.4102/sajems.v21i1.1970. WOS:000430860600001
Achim MV, Borlea NS, Găban L, Cuceu I (2018b) Rethinking the shadow economy in terms of happiness: evidence for the European Union member states. Technol Econ Dev Econ 24(1):199–228
Achim MV, Mirza N, Văidean VL (2022) The asymmetric impact of tax burden structures on the shadow economy: a panel analysis of old and new European Union countries. Appl Econ Lett. https://doi.org/10.1080/13504851.2022.2094876. WOS:000820178800001
Busato F, Chiarini B (2013) Steady state Laffer curve with the underground economy. Public Finance Rev 41(5):608–632
Chelliah RJ (1971) Trends in taxation in developing countries. Staff Pap Int Monetary Fund 18:254–0331
Crowe MT (1944) The moral obligation of paying just taxes. The Catholic University of America Press, Washington, DC
Devereux MP, De Mooij RA (2009) Alternative systems of business tax in Europe: An applied analysis of ACE and CBIT reforms, Study for the European Commission. DG Taxation and Customs Union
Friedman E, Johnson S, Kaufmann D, Zoido-Lobaton P (2000) Dodging the grabbing hand: The determinants of unofficial activities in 69 countries. J Public Econ 76:459–493
Kawano L, Slemrod J (2016) How do corporate tax bases change when corporate tax rates change? With implications for the tax rate elasticity of corporate tax revenues. Int Tax Public Financ 23(3):401–433
Laffer A (2004) The Laffer curve: past, present and future. The Heritage Foundation
Mara ER (2011) Causes and consequences of underground economy. MPRA Paper No. 36438
Mara R (2021) Drivers of the shadow economy in European Union welfare states: a panel data analysis. Econ Anal Policy 72:309–325
Mara ER, Sabău-Popa DC (2013) Determinants of underground economy in EU countries. Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania – AGER 0(special I):213–220
McGee RW (2000) Taxation in the Republic of Armenia: an overview and discussion from the perspectives of law, economics and ethics. ILSA J Int Comp Law 7(1):97–109
McGee RW (2008) Taxation and public finance in transition and developing economies. Springer, New York
McGee RW (2012) Annotated bibliography: 18 statement surveys. In: McGee RW (ed) The ethics of tax evasion; perspectives in theory and practice. Springer, New York, pp 499–598
Medina L, Schneider F (2019) Shedding light on the shadow economy: a global database and the interaction with the official one. CESifo Working Paper No. 7981
Morales A (2012) Understanding and interpreting tax compliance strategies among street vendors. In: McGee RW (ed) The ethics of tax evasion; perspectives in theory and practice. Springer, New York, pp 83–106
OECD (2022) The Organisation for Economic Co-operation and Development, indicators and data. Available at https://www.oecd.org/
Pashev KV (2008) Monitoring of tax corruption in transition economies: evidence from Bulgaria. In: McGee RW (ed) Taxation and public finance in transition and developing economies. Springer, New York, pp 321–362
Schneider F (2022) New COVID-related results for estimating the shadow economy in the global economy in 2021 and 2022. Int Econ Econ Policy 19:299–313. https://doi.org/10.1007/s10368-022-00537-6
Schneider FH, Klinglmair R (2004) Shadow economies around the world: what do we know? Universität Linz, Working Paper No. 0403
Smatrakalev G (2012) Is tax evasion our national sport? The Bulgarian case. In: McGee RW (ed) The ethics of tax evasion; perspectives in theory and practice. Springer, New York, pp 371–385
Torgler B (2004) Tax Morale in Asian countries. J Asian Econ 15:237–266
Torgler B (2007) Tax compliance and tax Morale: a theoretical and empirical analysis. Edward Elgar Publishing, Cheltenham Glos
Torgler B, Schneider F (2009) The impact of tax morale and institutional quality on the shadow economy. J Econ Psychol 30(3):228–245
Trabandt M, Uhlig H (2006) How far are we from the slippery slope? The Laffer Curve, SFB 649 Discussion Paper, 2006–023 April 3, pp. 1–69
Trandafir A, Brezeanu (2010) Optimalitatea politicii fiscale în România din perspective curbei Laffer, Economie teoretică şi aplicată (The optimality of the fiscal policy in Romania from the perspective of the Laffer curve, Theoretical and applied economics) Vol. XVIII, 8(561), pp. 53–61
Acknowledgement
This work was supported by a grant of the Romanian Ministry of Education and Research, CNCS - UEFISCDI, project number PN-III-P4-ID-PCE-2020-2174, within PNCDI III.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Ethics declarations
The authors declare that she has no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Achim, M.V., Văidean, VL., Borlea, S.N., Florescu, D.R. (2023). Does Fiscal Pressure Influence Shadow Economy? A Panel Data Analysis for the OECD Countries. In: Dion, M. (eds) Sustainable Finance and Financial Crime. Sustainable Finance. Springer, Cham. https://doi.org/10.1007/978-3-031-28752-7_12
Download citation
DOI: https://doi.org/10.1007/978-3-031-28752-7_12
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-28751-0
Online ISBN: 978-3-031-28752-7
eBook Packages: Business and ManagementBusiness and Management (R0)