nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2013‒01‒19
ten papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Relative Consumption and Tax Evasion By Laszlo Goerke
  2. From tax evasion to tax planning By Arnaud Bourgain; Patrice Pieretti; Skerdilajda Zanaj
  3. Peoples' views of taxation in Africa: A review of research on determinants of tax compliance By Odd-Helge Fjeldstad; Collette Schulz-Herzenberg; Ingrid Hoem Sjursen
  4. Improving Work Incentives: Evaluation of Tax Policy Reform Using SRMOD By RanÄ‘elovicÌ, SasÌŒa; RakicÌ, Jelena ZÌŒarkovicÌ
  5. Notes on the epistemology of fraud By Carlos Pimenta; Óscar Afonso
  6. Monetary Transfers for Children and Adolescents in Argentina: Characteristics and Coverage of a ?System? with Three Components By Fabio Bertranou; Roxana Maurizio
  7. The Welfare Impacts of Changes in the Brazilian Domestic Work Market By Edson Paulo Domingues; Kênia Barreiro de Souza
  8. Regulating Small Public Service Vehicles in Ireland: Is There a Problem of Oversupply? By Gorecki, Paul K.
  9. Comment réduire la fraude fiscale? Une expérience sur le signalement By David Masclet; Claude Montmarquette; Nathalie Viennot-Briot
  10. La fraude et la criminalité organisée dans l’Union Européenne By Jean-François Gayraud

  1. By: Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: Relative consumption effects or status concerns that feature jealousy (in the sense of Dupor and Liu, AER 2003) boost consumption expenditure. If consumption is financed by labour income, such status considerations increase labour supply and, hence, the tax base. A higher taxable income, in turn, can make tax evasion more attractive. We show for various specifications of preferences that the tax base effect generally dominates. Consequently, relative consumption effects tend to reduce tax evasion. This is true, irrespective of whether tax parameters are exogenous, guarantee a balanced budget or are set optimally.
    Keywords: Income taxes, Optimal taxation, Relative consumption, Tax evasion
    JEL: D62 H21 H23 H24 H26
    Date: 2013–01
  2. By: Arnaud Bourgain (CREA, University of Luxembourg); Patrice Pieretti (CREA, University of Luxembourg); Skerdilajda Zanaj (CREA, University of Luxembourg)
    Abstract: The aim of this paper is to analyze within a simple model how a re- moval of bank secrecy can impact tax revenues and banks' profitability assuming that offshore centers are able to offer sophisticated but legal or not easily detectable tax planning. Two alternative regimes are considered. A first in which there is strict bank secrecy and a second where there is international information exchange for tax purposes. We show in particular that sharing tax information with onshore coun- tries can be a dominant strategy for an OFC if there is enough scope for providing tax planning. Moreover, a partial reduction of tax lia- bilities can already prompt OFCs to voluntarily exchange relevant tax information. We also highlight a surprising result. The possible re- moval of bank secrecy may, under some conditions, reduce the onshore country's tax revenue.
    Keywords: offshore centers, tax planning, tax evasion
    JEL: F21 H26 H87
    Date: 2012
  3. By: Odd-Helge Fjeldstad; Collette Schulz-Herzenberg; Ingrid Hoem Sjursen
    Abstract: What are the key determinants of taxpayer compliance? And which features of citizen-state relations govern attitudes and behaviour regarding taxation? This paper examines the analytical foundation, methodological approaches and key findings of available empirical literature on taxpayer behaviour in Africa. Understanding how citizens perceive and experience taxation may provide an essential diagnostic of the political realities for tax reform. Attempts to broaden the tax base require insights into how citizens experience and perceive the tax system, whether people perceive they are paying taxes or not, what they eventually pay, their views on tax administration and enforcement, and whether and how their tax behaviour is correlated with how they perceive the state. Attitude and perception surveys of current and potential taxpayers may also help to identify perceived weaknesses of the tax system, and enable tax authorities to focus attention efficiently on high-risk categories of taxpayers.
    Keywords: Taxation, Tax behaviour, Compliance, Evasion, Fiscal exchange, Surveys
    Date: 2012
  4. By: RanÄ‘elovicÌ, SasÌŒa; RakicÌ, Jelena ZÌŒarkovicÌ
    Abstract: Inactivity and unemployment rates as well as informal employment rates in Serbia are particularly high among low-paid labor. Labour tax wedge is average at higher wage levels, but high at lower wage levels. The relatively high labour tax burden for low-paid employees is due to several reasons. The most important one is the existence of mandatory minimum base for social security contribution (SSC). This paper uses the tax and benefit micro-simulation model for Serbia (SRMOD), which is based upon EUROMOD platform, in order to evaluate the effects of the abolishment of mandatory minimum SSC base on labour supply incentives. We found that this policy reform would reduce effective average tax rates by more than it would reduce marginal tax rates implying a larger participation response than hours-of-work response. A decrease in both tax rates is most pronounced for lower income groups.
    Date: 2012–12–20
  5. By: Carlos Pimenta (OBEGEF, Faculdade de Economia, Universidade do Porto); Óscar Afonso (Faculdade de Economia, Universidade do Porto, CEFUP, OBEGEF)
    Abstract: Fraud, non-observed economy, money laundering, social decohesion and ethical degeneration are part of the same process. We need to understand the total process of fraud. This is not a social excrescence, but an integral element of the present society and an assumed element of social relations. The nowadays great crisis in which we live confirmed the importance of the criminological analysis of the frauds that are at their origin and that are discovered during the crisis. Bearing in mind Sutherland, who pays attention to the social significance of white collar crimes, the recent events show the importance of fighting and preventing economic-financial fraud. The success of this intent depends strongly on the knowledge that we have of it and also on the techniques that are at our disposal. In this cognitive effort, two simultaneous dynamics should be stressed, beyond the specialization in science and techniques: (i) the simultaneous analysis of the variables of the total process of fraud; (ii) the interdisciplinarity between sciences with either similar or closely-related scientific objects. Both dynamics still show great weaknesses. We argue: firstly, the gradual creation of a new interdisciplinary science to study fraud, in a broad sense; secondly, we consider that the new knowledge should develop the scientific object, integrating the five areas referred to above (fraud, non-observed economy, money laundering, social decohesion and ethical degeneration). The close association of fraud with international organized crime requires a global, integrated response, which is still not available. Our epistemological proposal can be a contribution to overcoming these limitations.
    Keywords: Fraud; complexity; interdisciplinarity
    Date: 2012–10
  6. By: Fabio Bertranou (Organización Internacional del Trabajo); Roxana Maurizio (Universidad Nacional de General Sarmiento y CONICET)
    Abstract: In 2009 Argentina established a new programme of transfers for children and adolescents, Asignación Universal por Hijo (Universal Child Allowance ? AUH), that was aimed at those families engaged in the informal economy, inactive adults without unemployment insurance, unemployed people without any social security payments and those working in domestic service. This non-contributory programme is an addition to those programmes already in existence: a contributory family allowance (AFC) and a tax deduction from income tax (known as the ?tax on earnings?) for each child (ACF). With the new programme, coverage was extended substantively in both quantitative and qualitative terms, taking over the role that was previously played by the Heads of Household Programme and the Families Programme. (...)
    Keywords: Monetary Transfers for Children and Adolescents in Argentina: Characteristics and Coverage of a ?System? with Three Components
    Date: 2012–08
  7. By: Edson Paulo Domingues (Cedeplar, Department of Economics, Universidade Federal de Minas Gerais); Kênia Barreiro de Souza (Cedeplar, Department of Economics, Universidade Federal de Minas Gerais)
    Abstract: Domestic work encompasses a series of activities such as cleaning, housekeeping, cooking, washing clothes and caring for children, elderly or disabled people and pets, among others. Although domestic workers may perform different types of activities, two features are common to all of them: the work is paid, and the work is done in a home other than that of the worker him/herself (ILO, 2011th; ILO, 2011ab). Because of these and other socio-economic characteristics, paid domestic workers are similar in a number of way, namely: i) predominance of female workers; ii) low wages; iii) the employer is an individual; iv) legislation does not follow the Consolidated Labour Laws (Consolidação das Leis do Trabalho ? CLT)?in fact, such labour rights are mentioned as exceptions in the Federal Constitution (Constituição Federal ? CF) itself; and v) there is a high degree of labour informality (ILO, 2011c; IBGE, 2012th). (?)
    Keywords: The Welfare Impacts of Changes in the Brazilian Domestic Work Market
    Date: 2012–11
  8. By: Gorecki, Paul K.
    Abstract: The small public service vehicle (SPSV) market in Ireland appears to have adjusted well to the changed economic circumstances. The reduction in demand for SPSV services occasioned by the recession has been met by a price and quantity adjustment. Prices are regularly discounted off the regulated maximum fare, while the number of SPSV operators has dropped by about 6 per cent per year since 2010. Estimates of oversupply of 13 to 22 per cent, albeit arguably biased upwards, are likely to be eliminated by the end of 2013/early 2014 at the earliest, and 2015/16 at the latest. Strategies have been put in place to deal with non-compliance with social welfare and tax rules. Hence for the Taxi Regulation Review Group in its December 2011 Report to base recommendations for extensive policy intervention on the view: (i) that there is considerable oversupply of SPSV services; (ii) that this is influenced in an important way by non-compliant operators; and, (iii) there is low exit from the industry is incorrect. Indeed, these recommendations which are being implemented, while no doubt containing sensible suggestions with regard to wheelchair accessible services and rural hackney services, at the same time will have the effect of reducing the flexibility of the SPSV market based on a model that seeks to favour the role of full time taxi operator. When combined with the 2010 prohibition on the issuing of new taxi and hackney licences, there is a real danger that when the economy revives and demand for SPSV services increases that there will be increased waiting times as they were in the 1990s when taxi numbers were restricted. There is an urgent need to reconsider these policy initiatives.
    Keywords: Ireland/Services/recession/taxes/regulation/Policy
    Date: 2012–10
  9. By: David Masclet; Claude Montmarquette; Nathalie Viennot-Briot
    Abstract: Notre étude s’intéresse aux politiques reposant sur les campagnes de communication visant à sensibiliser les gens au problème de la fraude fiscale et à les inciter à réduire leur comportement de fraudeur. Il s’agit de politiques en amont puisqu’elles agissent avant la déclaration de revenus. Combien de ressources devons-nous consacrer à ce type de politiques sachant que pour être socialement rentable, chaque dollar consacré à une politique doit générer au moins un dollar de réduction de la fraude fiscale? Quel type de campagne de communication est la plus efficace? <p> Notre étude expérimentale considère trois éléments de la fraude fiscale liés à l’information et la communication : l’information sur les comportements des autres participants en matière de conformité fiscale, la possibilité de signaler un ou plusieurs participants considérés comme fraudeurs, et l’effet sur les taux de conformité de dédier les taxes perçues à une cause spécifique soit celle de l’environnement. <p> Nos principaux résultats sont les suivants : (1) l’information sur la façon dont sont utilisées les taxes n’a pas d’effet significatif. (2) l’information relative au taux de déclaration moyen des autres contribuables n’a pas d’effet positif sur le taux de déclaration de ses impôts et peut même avoir un effet négatif pervers inhérent au rôle joué par l’effet d’apprentissage. (3) L’information sur le taux de déclaration des autres contribuables couplée avec la possibilité de signaler les contrevenants a un effet positif fort et très significatif sur le taux de déclaration. <p> Dans le traitement avec signalement, il importe de noter que la simple menace d’être signalé amène une hausse dans les taux de déclaration. Si l’audit aléatoire représente un élément de risque que l’on peut facilement incorporer dans la décision de frauder ou non, la possibilité d’être signalé comme fraudeur augmente l’incertitude ou l’ambigüité associées au comportement de frauder. À l’évidence, l’incertitude d’être signalé est plus difficile à estimer pour le participant et est l’élément important pour dissuader la fraude. <p> Finalement, dans le cadre des paramètres retenus pour notre expérience, on a pu obtenir 30 % de plus de rentrées fiscales avec le traitement de signalement.
    Date: 2013–01–01
  10. By: Jean-François Gayraud (l'Ecole nationale supérieure de police (ENSP, Saint-Cyr-au-Mont-d'Or))
    Abstract: Intervention devant la commission spéciale du parlement européen sur « la criminalité organisée, la corruption et le blanchiment de capitaux » (CRIM), le 19 juin 2012 à 11h00.
    Date: 2012–08

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