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Analysis Of The Shadow Economy And Its Fiscal Effects In Ukraine

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  • Pirnykoza, Pavlo

    (Ternopil National Economic University)

Abstract

This article analyses the share of shadow economy in Ukraine and its effects on the domestic fiscal sphere. It was made an attempt to calculate the approximate tax losses, which was resulted by the informal sector of economy. Also, we tried to search the influence of the shadow economy on the consolidate budget revenue, expenditures and deficit. The results of this paper are: 1) the level of the shadow economy in Ukraine during last 5–10 years is between 34–43 % of GDP; 2) the annual average tax losses are about 15.4 % of official GDP, of which 10.4 % is the losses of central and local budgets, 5.0 % is the losses of Ukrainian Pension Fund; 3) it was empirically proven the influence of the shadow economy on the amount and the structure of expenditures of Consolidated Budget of Ukraine. We found strong support that the bigger size of informal sector leads to the reduction of the capital expenditures’ share in the general expenditures of Consolidated Budget of Ukraine. JEL Code: E620, O170, H260, H200, C 100.

Suggested Citation

  • Pirnykoza, Pavlo, 2018. "Analysis Of The Shadow Economy And Its Fiscal Effects In Ukraine," EUREKA: Social and Humanities, Scientific Route OÜ, issue 2, pages 30-38.
    • Handle: RePEc:nos:social:y:2018:i:2:p:30-38
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    References listed on IDEAS

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    1. Friedrich SCHNEIDER, 2016. "Tax Losses due to Shadow Economy Activities in OECD Countries from 2011 to 2013: A preliminary calculation," Turkish Economic Review, KSP Journals, vol. 3(1), pages 1-15, March.
    2. Hassan, Mai & Schneider, Friedrich, 2016. "Size and Development of the Shadow Economies of 157 Countries Worldwide: Updated and New Measures from 1999 to 2013," IZA Discussion Papers 10281, Institute of Labor Economics (IZA).
    3. Leandro Medina & Friedrich Schneider, 2017. "Shadow Economies around the World: New Results for 158 Countries over 1991-2015," CESifo Working Paper Series 6430, CESifo.
    4. F. Schneider, 2016. "The Size And Development Of The Shadow Economies Of Ukraine And Six Other Eastern Countries Over The Period Of 1999 – 2015," Economics of Development, Kharkiv National University of Economics, vol. 78(2), pages 13-19.
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