Tax reforms and the underground economy: a simulation-based analysis

Underground Economy And Tax Gap

Tax evasion and the underground economy*

The problem of tax evasion arises in an economy in which every taxpayer regards the output of the public sector as independent of her actions and the taxpayer can be audited by the public authority and fined, if found guilty. Earlier contributions to the study of tax evasion in a game-theoretical framework include Sandmo (1981), Reinganum and Wilde (1985, 1986), Graetz et al. (1986), Greenberg ...

underground economy and tax gap

Trade and Tax Reforms in a Cash-in-Advance Economy

We examine the effects of coordinated trade-tax reforms and isolated tariff reforms on market access, government revenue and welfare for a small monetary economy, under the assumption that a certain fraction of purchases of each good must be financed with cash held in advance. Moreover, we allow for this fraction of purchases to vary across markets, in the sense that the required amount of mone...

Investigating the Relationship between Green Tax Reforms and Shadow Economy Using a CGE Model - A Case Study in Iran

I n the past decades, the effect of different tax amendments on various economic issues has been studied. The majority of these studies have avoided considering shadow economy as part of the calculation and analysis, and an issue, which has received little attention, is the relationship between green tax reforms and shadow economy, as for informal labor, which is well-connected to un...