Tax evasion and economic growth in the EU

Jana Stavjaňová and Leos Vitek

International Journal of Economic Policy in Emerging Economies, 2022, vol. 16, issue 1, 40-57

Abstract: The aim of this study is to verify the presence of a negative link between the size of tax evasion and economic growth and whether this possible link is stronger in the countries with higher taxation. Based on the EU 28 data and the period 2003-2014, the results of regression analysis of panel data in all the relevant models are indeed indicative of a negative impact of tax evasion on the economy. We did not confirm the hypothesis that there are differences in the impact of tax evasion on the economy between the more respectively less taxed countries. The group of Northern European countries with higher tax quota reports its negative regression coefficient lower than Central European countries. However, when we compare the results of countries with higher tax quota with those of Eastern Europe where average tax quota is low, we do not reach the same conclusion.

Keywords: tax evasion; shadow economy; economic growth; EU countries. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:16:y:2022:i:1:p:40-57

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