Business Tax Evasion in Transition Economies: A Cross-Country Panel Investigation
Lumir Abdixhiku, Geoff Pugh, Iraj Hashi
European Journal of Comparative Economics, 2018, vol. 15, issue 1, 11-36
This paper uses the Business Environment and Enterprise Performance Survey data for the years 1999, 2002 and 2005 to investigate business tax evasion in 24 transition economies. We use both conventional fixed effects estimation and the recently developed Fixed Effect Vector Decomposition approach. The most robust finding in our study is the importance of institutional factors. In particular, higher levels of corruption related to tax administration and slower transition reforms substantially reduce the amount of taxes paid by businesses in transition economies. In addition, we find a positive relationship between evasion and tax rate; and identify minor effects of the macroeconomic environment. We also find that social norms play a significant role in tax evasion. These findings inform policy recommendations intended to reduce either the possibility and/or the inclination to evade.
Keywords: Tax Evasion; Tax Compliance; Transition Economies; Corruption; Institutions; Tax Rate (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:liu:liucej:v:15:y:2018:i:1:p:11-36
Access Statistics for this article
European Journal of Comparative Economics is currently edited by Matteo Migheli, Giovanni Ramello, Koji Domon, Peter Grajzl, David M. Kemme, Marcello Signorelli and Richard Watt
More articles in European Journal of Comparative Economics from Cattaneo University (LIUC) Contact information at EDIRC.
Bibliographic data for series maintained by Piero Cavaleri ().