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Why People Evade Taxes in the Czech and Slovak Republics: A Tale of Twins

Jan Hanousek () and Filip Palda

Public Economics from University Library of Munich, Germany

Abstract: The present paper uses a survey of 1062 Czechs and 524 Slovaks to ask why people evade taxes. We maintain that the Czech and Slovak Republics are “twins” separated at birth and that divergences between these countries since their separation in 1992 can explain divergences in their rates of tax evasion. High Slovak tax rates and lower Czech tax rates seem to explain little of the difference in evasion between the two countries. Rising Czech incomes seems the main reason that Czech Republic evades more taxes. We also look at detailed demographic and psychological reasons for tax evasion. We find that morality is a strong deterrent to evasion.

Keywords: Tax evasion; transition economies; Czech Republic; Slovak Republic (search for similar items in EconPapers)
JEL-codes: H26 H43 K42 O17 (search for similar items in EconPapers)
Date: 2002-05-09
New Economics Papers: this item is included in nep-law and nep-pbe
Note: Type of Document - pdf; prepared on IBM-PC; to print on Any;
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