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Identifying the Existing Connections Between Tax Evasion and Corruption and Determining a Functional Link Between the Two Phenomena

Author

Listed:
  • Carmen UZLAU

    (Hyperion University of Bucharest)

  • Corina Maria ENE

    (Hyperion University of Bucharest)

Abstract

Informal economic exchanges are based on agreements that are inaccessible in the formal system, the object of which is to translate into restricted goods, access to decision-makers, influence on administrative decisions, or the enjoyment of preferential treatment in the bureaucratic system. Individuals have access to social connections within the institutional hierarchy through a system of „intercessions, acquaintances and relationships”. Favors start from getting a job, eventually in a government agency, priority in legal matters, preferential position in problem solving, and end to brokering in obtaining licenses, certificates, passports, driving licenses, identity cards, tax amnesty and so on. Corruption, a phenomenon specific to the underground economy, is a deliberate deviation from the legal standards materialized in the misuse of public resources by official persons for private purposes. It is a deviant phenomenon with important economic consequences whose motivation and mechanisms reside in the inner tensions of the individual who is unable to access legal ways of achieving personal goals. However, it should be pointed out that in most cases, tax evasion and corruption go hand in hand. Tax evasion does not exclude corruption, while reciprocal is also valid.

Suggested Citation

  • Carmen UZLAU & Corina Maria ENE, 2018. "Identifying the Existing Connections Between Tax Evasion and Corruption and Determining a Functional Link Between the Two Phenomena," Hyperion Economic Journal, Faculty of Economic Sciences, Hyperion University of Bucharest, Romania, vol. 6(1), pages 3-9, March.
    • Handle: RePEc:hyp:journl:v:6:y:2018:i:1:p:3-9
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    References listed on IDEAS

    as
    1. Albu, Lucian Liviu, 2007. "Estimating the Size of Underground Economy in Romania," Working Papers of Institute for Economic Forecasting 070601, Institute for Economic Forecasting.
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    More about this item

    Keywords

    corruption; tax evasion; theories and models of corruption;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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