The Evolution of Tax Evasion in the Czech Republic: A Markov Chain Analysis
AbstractWe use a dataset of 1062 individuals from the Czech Republic to forecast the evolution of tax evasion in that country. We ask each respondent how intensely (never, sometimes, often) he evaded taxes in 1995, 1999, and 2000, to calculate probabilities the average individual will move between these categories of evasion in any given year. These "trasition" probabilities allow us to predict a rising tide of tax evasion in the next decade. We estimate the reduced form parameters which determine evasion and suggest how government might influence these parameters to prevent the Czech Republic from bogging down in a permanent mire of tax evasion. (JEL Codes : H26, H43, K42, O17)
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0205002.
Date of creation: 09 May 2002
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Tax evasion; transition economies; dynamic modelling; Czech Republic;
Find related papers by JEL classification:
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
- NEP-LAW-2002-06-13 (Law & Economics)
- NEP-PBE-2002-06-13 (Public Economics)
- NEP-PUB-2002-06-13 (Public Finance)
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