FACTORS OF TAX EVASION: THE CASE OF THE CZECH REPUBLIC

• Authors: Josková Kateřina , Finardi Savina , Arltová Markéta
• Languages of publication: EN

Abstracts

EN

The main goal of this paper is to estimate factors of tax evasion in the Czech Republic. Among other things, tax evasion reduces state revenues which fact leads to a decrease in the quantity and quality of publicly provided goods and services. Therefore it is necessary to ensure that taxpayers comply with their tax obligations. Firstly, we use the monetary method (cash/deposit ratio) to estimate the size of tax evasion in absolute and relative terms. According to our estimates, the extent of tax evasion in the Czech Republic was almost 3.6 percent of GDP in 2021. Secondly, we use multi-variate time series co-integration analysis models to analyse the economic, tax, and institutional determinants of tax evasion in the Czech Republic. The factors negatively associated with tax evasion include tax overpayments, VAT revenue, and implementation of tax measures introduced in 2020. The positive impact has GDP, PIT revenue, CIT revenue, inflation, monetary freedom, Gross National Savings, trade freedom, PIT rate, unemployment, and average wage.

Keywords

EN

TAX EVASION; INCOME TAXES; VALUE-ADDED TAX; CZECH REPUBLIC

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2023
• Volume: 71
• Issue: 10
• Pages: 596 – 617

Contributors

author

Josková Kateřina

• Prague University of Economics and Business, Department of Public Finance, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic

• https://orcid.org/0009-0009-7271-935X

author

Finardi Savina

• https://orcid.org/0000-0002-4844-6015

author

Arltová Markéta

• https://orcid.org/0000-0001-7313-6927

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2023.10.02