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Does inclusive financial development matter for firms’ tax evasion? Evidence from developing countries

M. Mostak Ahamed

Economics Letters, 2016, vol. 149, issue C, 15-19

Abstract: We find that firms in developing countries with more inclusive financial sector evade taxes to a lesser extent. This effect is stronger for the countries with stronger legal rights and a smaller share of the informal economy. The results suggest that the growing public policy emphasis on achieving inclusive financial development may also help reduce tax evasion in developing countries.

Keywords: Financial inclusion; Financial outreach: corporate tax evasion; Informal economy; Institutional environment (search for similar items in EconPapers)
JEL-codes: G21 H26 O10 (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:eee:ecolet:v:149:y:2016:i:c:p:15-19