nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2015‒07‒25
five papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Corruption and Tax Evasion: Reflections on Greek Tragedy By Anastasia Litina; Theodore Palivos
  2. The Ends Against the Middle. Attitudes Towards Taxation By Ana I. Moro Egido; Angel Solano Garcia
  3. Surcharges and penalties in UK tax law By Rita de la Feria; Parintira Tanawong
  5. El ahorro en condiciones formales e informales By Mariano Bosch; Angel Melguizo; Ximena Peña; David Tuesta

  1. By: Anastasia Litina (University of Luxembourg); Theodore Palivos (Athens University of Economics and Business)
    Abstract: We provide empirical support and a theoretical explanation for the vicious circle of political corruption and tax evasion in which countries often fall into. We address this issue in the context of a model with two distinct groups of agents: citizens and politicians. Citizens decide the fraction of their income for which they evade taxes. Politicians decide the fraction of the public budget that they peculate. We show that multiple self-fulfilling equilibria with different levels of corruption can emerge based on the existence of strategic complementarities, indicating that “corruption” may corrupt. Furthermore, we find that standard deterrence policies cannot eliminate the multiplicity of equilibria. Instead, policies that impose a strong moral cost on tax evaders and corrupt politicians can lead to a unique equilibrium.
    Keywords: Corruption; Tax Evasion; Multiple Equilibria; Social Stigma
    JEL: D73 E62 H26
    Date: 2015–06
  2. By: Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.); Angel Solano Garcia (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: Recent tax evasion scandals have brought into question the progressivity of taxation in many EU countries. In this paper we analyze the effect of the concern about tax evasion on people’s attitudes towards taxation in EU countries. We find that concern about tax evasion may produce a U-shaped relationship between an individual’s income and preferences for taxation in line with recent theoretical studies. Moreover, we find that the perceived level of tax evasion, the perceived waste of public resources and the intensity of tax enforcement reduce public support for taxation. In contrast, concern about fairness in tax compliance favours it.
    Keywords: attitudes, taxation, tax evasion, multilevel models
    JEL: H3 H26
    Date: 2015–07–22
  3. By: Rita de la Feria (Durham University); Parintira Tanawong (Durham University)
    Abstract: This paper reviews the tax penalties' regime in the UK, in the context of a general anti-evasion policy. It argues that the global economic crisis has had a significant impact in the UK surcharges and penalties system, intensifying the process initiated before, towards a much tougher regime. This new approach can be explained party on the basis of traditional considerations, such of deterrence and punishment; there is the suspicion, however, that it may be also based on other considerations, namely as an additional source of revenue, or as compensatory measure for the revenue lost through fraud. It concludes that tax penalties whose ratio is no longer (solely) deterrence are disproportionate, and as such, contrary to EU law, and the ECHR.
    Date: 2015
  4. By: Emre Atsan (Hacettepe University Inst); Mete D (Çorum University, Inst)
    Abstract: Turkey, always in a process of transition in many areas, and a vicious cycle may not exceed beyond this process has been a long time in an effort to take its place in the globalized world. Our economy has entered a transition to a free market economy in the 1980s and has taken important steps in this process. The share of economic crime has increased while the crime has changed dimension after the accrete of the settlement of the free market economy. In our study, we made a brief introduction to the concept of economic crime, especially of Turkish tax system are evaluated in terms of economic crimes and punishments. Then, by making comparison with the legislation of some developed countries, one of the reforms in the Process of the European Union, the new Turkish Penal Code has been assessed the effects on the Turkish Tax System and problems and solutions are listed.
    Keywords: Economic Crime, Turkish Tax System, Comparative Analysis
    JEL: K34 O57 K14
  5. By: Mariano Bosch; Angel Melguizo; Ximena Peña; David Tuesta
    Abstract: En este estudio se analizan los distintos factores personales que afectan a las condiciones del ahorro segun dos innovadoras encuestas realizadas por el Banco Interamericano de Desarrollo (BID) en las ciudades de Lima y Mexico D.F.
    Keywords: Documento de Trabajo, Economías Desarrolladas, Inclusión Financiera, Investigación, Latam, México, Perú
    JEL: D14 D83 G21
    Date: 2015–07

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