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on Informal and Underground Economics |
| By: | Lompo, Miaba Louise; Ouoba, Marie Madeleine |
| Abstract: | Understanding tax evasion and tax avoidance mecanism is of critical importance in both developed and developing countries. This paper shed light on five main strategies used by corporation and wealthy taxpayers to avoid taxes including tax heavens, underground economy, aggressive tax optimization, parallel financial markets and cryptocurrencies. We also propose several actions to deal with tax non-compliance across the globe including prevention, peer reporting, active monitoring of compliance indicators and international cooperation. Theses actions might be combined to achieve optimal results in reducing the iompact of tax evasion and tax avoidance. |
| Keywords: | tax evasion, tax avoidance, tax compliance |
| JEL: | M48 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113410&r= |
| By: | Burgstaller, Lilith; Pfeil, Katharina |
| Abstract: | Collaborative evasion of taxes and social security fees is prevalent in household services, when a household hires a service provider and no third party is involved. However, evidence on the determinants of collaborative tax evasion in general and the household context in particular is lacking. This paper examines two coordination mechanisms of collaborative tax evasion: A partner's signaled intention and information about majority's evasion behavior (empirical evasion expectation). We implement an interactive tax evasion game in an online labor market (MTurk) with 560 participants. Our findings show that priming with an empirical evasion expectation increases the fraction of evaded transactions by 20 percentage points. Our treatment manipulation of intention signals does not render a significant effect on evasion. However, when willingness to evade is signaled first in the chat, the probability of evasion increases by 45 percentage points. |
| Keywords: | Collaborative Tax Evasion,Compliance,Social Norm,Intention,Online Experiment |
| JEL: | H26 E26 O17 D91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:2206&r= |
| By: | Di Caro, Paolo; Figari, Francesco; Fiorio, Carlo; Manzo, Marco; Riganti, Andrea |
| Abstract: | We use a rich administrative dataset on individual tax returns from 2008 to 2015 to analyse the behavioural and distributive effects of a flat tax (FT) reform introduced in 2011 for residential property income in Italy replacing the progressive personal income tax. Linking a panel of individual tax data with cadastral property records, and using a difference-in-difference identification strategy, we address five research questions: (i) does the FT increase the probability of declaring a positive rental income to the tax authorities? (ii) does the FT increase the declared tax base? (iii) is the reduced tax burden shared with the tenant? (iv) does the FT affect the overall tax revenue? (v) who are the gainers of the policy? The estimated intention-to-treat effects suggest that the decrease of tax evasion is limited whereas tax burden reduction is large, it is not shared with tenants and it mostly benefits top-income taxpayers. Overall, top 1% of property owners reap about 20% of the overall lost tax revenues. |
| Keywords: | Flat tax reform; administrative data; tax evasion; income distribution |
| JEL: | D12 H24 H25 |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113684&r= |
| By: | Burgstaller, Lilith; Feld, Lars P.; Pfeil, Katharina |
| Abstract: | Little is known about the size and determinants of undeclared work. While approaches to measure the shadow economy have been extensively discussed, conventional surveys dominate research on undeclared work. We review and extend this literature by first referring to the most recent survey data on undeclared work in Germany and, second, by discussing four experimental survey techniques as well as their few applications to questions of undeclared work. We argue that the randomized response technique and list experiments would validate and improve prevalence estimates of undeclared work, whereas careful design of information provision experiments and discrete choice experiments would fill the gap on determinants that causally affect decisions to supply and demand undeclared work. |
| Keywords: | Undeclared Work,Experimental Survey,Survey Data |
| JEL: | H26 E26 O17 D91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:2207&r= |
| By: | Kohnert, Dirk |
| Abstract: | Sub-Saharan Africa emerged in the past years as global epicentre of Islamist terrorism. The impact of terrorism on the economy has a negative bearing on the formal and a positive effect on the informal sector. Among other things, this is due to the poorly diversified development economies of African countries and the class-specific impact of terrorism on welfare. This concerns not only a drop in sales, income and employment and rising transaction costs in the affected sectors, but also increasing poverty, hunger and hardship for the poor and needy. Transnational terrorism amplifies both the negative and the positive effects. African countries that have suffered severely from these attacks include Somalia, Kenya, Nigeria, Mali, Burkina Faso, South Sudan, Libya and Egypt. But even West African countries such as Ghana and Senegal which have been spared so far from terrorist attacks, the menace is growing, and economic effects are already tangible. Since the informal sector, i.e. the shadow economy with all its ambivalent facets, including cross-border crime, is still dominant in many African countries, especially in West Africa, this sector is of particular importance. It is still one of the largest in the world. The fight against Islamist terrorism is not just a military issue. In the economic sphere too it should be fought at its roots. Since most of the African poor live in and from the informal sector, which is also a breeding ground for criminal activities such as human trafficking of all kinds, money laundering and terrorists, they suffer the most from the negative consequences. Terrorists' sources of funding often derive from the proceeds of illegal trade. The close ties between criminal and terrorist groups can undermine the very foundations of the republican state and weaken democratic institutions. |
| Keywords: | Islamist terrorism; Islamism; organized crime; informal economy; shadow economy; fragile state; poverty in Africa; extremism; ISIS; arms deals; arms industry; trafficking; Ghana; Kenya; Senegal; Ivory Coast; Sub-Sahara Africa; West Africa; Nigeria; Benin; Mali; Burkina Faso; Somalia; South Sudan; Postcolonialism; African Studies; |
| JEL: | E26 F13 F52 F54 H56 N17 N47 O17 P16 Z13 |
| Date: | 2022–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113603&r= |
| By: | Sonia Filipetto (Universidad Nacional General Sarmiento); Ariela Micha (Universidad Nacional General Sarmiento/CONICET); Francisca Pereyra (Universidad Nacional General Sarmiento); Cecilia Poggi (AFD); Martín Trombetta (Universidad Nacional General Sarmiento/CONICET) |
| Abstract: | The recent growth of the platform economy as a tool for labour exchanges has brought about concerns on the overall quality of jobs created. As labour platforms leave a digital trace, this paper assesses whether platforms can help to increase registered labour in contexts of extended informality as the one for Argentina, asking what does formalization via registration - if any - actually imply for workers and how do they perceive it. The article inspects three on-demand occupations in the Buenos Aires Metropolitan Area: private passengers’ transportation (Uber), domestic work (Zolvers) and home repair services (Home Solution). The main results show that platforms “formalization effect” is dependent on several factors: a platform’s business model, or the company’s interest and need to promote or encourage such process; the pre-existing occupational dynamics in terms of formalization; and general labour market conditions. In the context of an Argentine labour market harmed by a prolongued recession, most transitions to formality via the platform occur to previously unemployed workers who join them. |
| Keywords: | Digital platforms; Informality; Registration; Labour transitions; Decent work. |
| JEL: | O17 J46 J60 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:154&r= |
| By: | Natalia Porto (CEDLAS-IIE-FCE-UNLP); Pablo (CEDLAS-IIE-FCE-UNLP); Manuela Cerimelo (CEDLAS-IIE-FCE-UNLP) |
| Abstract: | This paper aims to identify and characterize the potential of green jobs in Argentina, i.e., those that would benefit from a transition to a green economy, using occupational green potential scores calculated in US O*NET data. We apply the greenness scores to Argentine household survey data and estimate that 25% of workers are in green jobs, i.e., have a high green potential. However, when taking into account the informality dimension, we find that 15% of workers and 12% of wage earners are in formal green jobs. We then analyze the relationship between the greenness scores (with emphasis on the nexus with decent work) and various labor and demographic variables at the individual level. We find that for the full sample of workers the green potential is relatively greater for men, the elderly, those with very high qualifications, those in formal positions, and those in specific sectors such as construction, transportation, mining, and industry. These are the groups that are likely to be the most benefited by the greening of the Argentine economy. When we restrict the sample to wage earners, the green potential score is positively associated with informality. |
| JEL: | E20 Q50 J80 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0301&r= |
| By: | Philippe Askenazy (Centre Maurice Halwachs); Thomas Breda (IPP - Institut des politiques publiques, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Flavien Moreau (FMI - International Money Fund); Vladimir Pecheu (Aix-Marseille School of Economics) |
| Abstract: | Various legal obligations in terms of social dialogue, profit sharing and accounting apply to French companies when they reach the threshold of 50 employees. This policy brief shows that a significant proportion of companies voluntarily under-report their workforce below this threshold and this allows them to avoid their obligations. Compliance with the law in terms of social dialogue or profit-sharing thus appears to be linked to the number of employees that companies declare and not to their actual workforce. These results illustrate how the labor code can be circumvented in a complex regulatory environment and in the absence of sufficient means of oversight. They invite reflection on the use of more direct and effective methods of monitoring compliance with the law. They also invite caution in considering the results of several recent studies that quantify the cost of legal obligations at the 50-employee threshold, assuming that they are fully respected in practice. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03693461&r= |
| By: | Kohnert, Dirk |
| Abstract: | Sub-Saharan Africa emerged in the past years as global epicentre of Islamist terrorism. The impact of terrorism on the economy has a negative bearing on the formal and a positive effect on the informal sector. Among other things, this is due to the poorly diversified development economies of African countries and the class-specific impact of terrorism on welfare. This concerns not only a drop in sales, income and employment and rising transaction costs in the affected sectors, but also increasing poverty, hunger and hardship for the poor and needy. Transnational terrorism amplifies both the negative and the positive effects. African countries that have suffered severely from these attacks include Somalia, Kenya, Nigeria, Mali, Burkina Faso, South Sudan, Libya and Egypt. But even West African countries such as Ghana and Senegal which have been spared so far from terrorist attacks, the menace is growing, and economic effects are already tangible. Since the informal sector, i.e. the shadow economy with all its ambivalent facets, including cross-border crime, is still dominant in many African countries, especially in West Africa, this sector is of particular importance. It is still one of the largest in the world. The fight against Islamist terrorism is not just a military issue. In the economic sphere too it should be fought at its roots. Since most of the African poor live in and from the informal sector, which is also a breeding ground for criminal activities such as human trafficking of all kinds, money laundering and terrorists, they suffer the most from the negative consequences. Terrorists' sources of funding often derive from the proceeds of illegal trade. The close ties between criminal and terrorist groups can undermine the very foundations of the republican state and weaken democratic institutions. |
| Keywords: | Terrorisme islamiste; Islamisme; crime organisé; économie informelle; économie souterraine; terrorisme; État fragile; pauvreté; extrémisme; État islamique; trafic de stupéfiants, trafic d'armes; trafic; Ghana; Kenya; Sénégal; Afrique subsaharienne; Afrique de l'Ouest; Nigeria; Bénin; Côte d'Ivoire; Mali, Burkina Faso; Somalie; Soudan du Sud; Postcolonialisme; Études africaines; |
| JEL: | E26 F35 F52 F54 H56 N17 N47 O17 P16 P26 Z12 Z13 |
| Date: | 2022–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113605&r= |