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Potensi Penerimaan Pajak Dari Underground Economy Di Indonesia
[underground economy activities in Indonesia]

Author

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  • Nizar, Muhammad Afdi
  • Purnomo, Kuntarto

Abstract

This study aims to estimate the size of underground economy activities in Indonesia. Based on the results of these estimates, further calculated the potential tax loss due to the existence of underground economy activities. This study was conducted using quantitative approaches, namely currency demand model which is estimated by ordinary least square (OLS) method. By using time series (quarterly) data period 2000 – 2009 we found that the size of underground economy is about Rp164, 4 trillion per year on average, equivalent to 6% of GDP. Meanwhile, the potential tax loss due to the activity estimated at Rp20,6 trillion on average per year, or approximately 0.69% of GDP.

Suggested Citation

  • Nizar, Muhammad Afdi & Purnomo, Kuntarto, 2011. "Potensi Penerimaan Pajak Dari Underground Economy Di Indonesia [underground economy activities in Indonesia]," MPRA Paper 65608, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65608
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    References listed on IDEAS

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    Cited by:

    1. Iswahyudi, Heru, 2020. "The problem of gross receipts taxes in Indonesia: Economic distortions and policy options," MPRA Paper 100617, University Library of Munich, Germany.

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    More about this item

    Keywords

    economic growth; official economy; underground economy; tax rate;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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