Distributional Implications of Tax Evasion in Greece
The shadow economy and tax evasion are both widespread in Greece. This has adverse effects in terms of horizontal and vertical equity, as well as in terms of efficiency. We take advantage of access to a large sample of income tax returns in 2004/05, and compare tax reported incomes with those observed in the household budget survey of that year. We re-weight our two datasets to make them fully comparable, and carefully select the reference population. We then calculate ratios of income under-reporting by region and income source. The synthetic distribution of reported incomes is then fed into a taxbenefit model to provide preliminary estimates of the size and distribution of income tax evasion in Greece. Income under-reporting is estimated at 10%, resulting in a 26% shortfall in tax receipts. The paper finds that the effects of tax evasion are higher income inequality and poverty, as well as lower progressivity of the income tax system.
|Date of creation:||Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/europeanInstitute/research/hellenicObservatory/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
- Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-53, July.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- Caridi, Paolo & Passerini, Paolo, 2001. "The Underground Economy, the Demand for Currency Approach and the Analysis of Discrepancies: Some Recent European Experience," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 239-50, June.
- Roberto Dell’Anno & Miguel Gómez-Antonio & Angel Alañon-Pardo, 2007.
"The shadow economy in three Mediterranean countries: France, Spain and Greece. A MIMIC approach,"
Springer, vol. 33(1), pages 197-197, July.
- Roberto Dell’Anno & Miguel Gómez-Antonio & Angel Pardo, 2007. "The shadow economy in three Mediterranean countries: France, Spain and Greece. A MIMIC approach," Empirical Economics, Springer, vol. 33(1), pages 51-84, July.
- Friedrich Schneider & Robert Klinglmair, 2004.
"Shadow Economies Around the World: What Do We Know?,"
CREMA Working Paper Series
2004-03, Center for Research in Economics, Management and the Arts (CREMA).
- Friedrich Schneider & Robert Klinglmair, 2004. "Shadow economies around the world: what do we know?," Economics working papers 2004-03, Department of Economics, Johannes Kepler University Linz, Austria.
- Schneider, Friedrich & Klinglmair, Robert, 2004. "Shadow Economies around the World: What Do We Know?," IZA Discussion Papers 1043, Institute for the Study of Labor (IZA).
- Philip Cagan, 1958. "The Demand for Currency Relative to Total Money Supply," NBER Chapters, in: The Demand for Currency Relative to Total Money Supply, pages 1-37 National Bureau of Economic Research, Inc.
- James Andreoni & Brian Erard & Jonathan Feinstein, 1998.
Journal of Economic Literature,
American Economic Association, vol. 36(2), pages 818-860, June.
- Edgar L. Feige, 2004. "How Big IS the Irregular Economy?," Macroeconomics 0404005, EconWPA.
- Trevor Breusch, 2006. "Size, Causes and Consequences of the Underground Economy: An International Perspective Edited by Christopher Bajada and Friedrich Schneider," The Economic Record, The Economic Society of Australia, vol. 82(259), pages 492-494, December.
- Carlo V Fiorio & Francesco D'Amuri, 2005. "Workers' Tax Evasion in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(2-3), pages 247-270, November.
- Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
- Frey, Bruno S. & Weck-Hanneman, Hannelore, 1984. "The hidden economy as an 'unobserved' variable," European Economic Review, Elsevier, vol. 26(1-2), pages 33-53.
- Sanjit Dhami & Ali Al-Nowaihi, 2006.
"A Simple Model Of Optimal Tax Systems: Taxation, Measurement And Uncertainty,"
University of Manchester, vol. 74(6), pages 645-669, December.
- Sanjit Dhami & Ali al-Nowaihi, 2005. "A Simple Model of Optimal Tax Systems: Taxation, Measurement and Uncertainty," Discussion Papers in Economics 05/25, Department of Economics, University of Leicester.
- Jan Hanousek & Filip Palda, 2006. "Problems measuring the underground economy in transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(4), pages 707-718, October.
- Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June.
- Benno Torgler, 2003. "Tax Morale, Rule-Governed Behaviour and Trust," Constitutional Political Economy, Springer, vol. 14(2), pages 119-140, June.
- Simon C. Parker, 2003. "Does Tax Evasion Affect Occupational Choice?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(3), pages 379-394, 07.
- Panos Pashardes & Alexandros Polycarpou, 2008. "Income Tax Evasion, Inequality and Poverty," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 2(2), pages 37-49, December.
- Naomi E. Feldman & Joel Slemrod, 2007. "Estimating tax noncompliance with evidence from unaudited tax returns," Economic Journal, Royal Economic Society, vol. 117(518), pages 327-352, 03.
- Phillip Cagan, 1958. "The Demand for Currency Relative to the Total Money Supply," Journal of Political Economy, University of Chicago Press, vol. 66, pages 303.
- Thomas, Jim, 1999. "Quantifying the Black Economy: 'Measurement without Theory' Yet Again?," Economic Journal, Royal Economic Society, vol. 109(456), pages F381-89, June.
- Jan Hanousek & Filip Palda, 2002.
"Quality of Government Services and the Civic Duty to Pay Taxes in the Czech and Slovak Republics, and other Transition Countries,"
- Jan Hanousek & Filip Palda, 2004. "Quality of Government Services and the Civic Duty to Pay Taxes in the Czech and Slovak Republics, and other Transition Countries," Kyklos, Wiley Blackwell, vol. 57(2), pages 237-252, 05.
- Pierre Pestieau & Uri M. Possen & Steven M. Slutsky, 2004. "Jointly Optimal Taxes and Enforcement Policies in Response to Tax Evasion," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(2), pages 337-374, 05.
- Philip Cagan, 1958. "The Demand for Currency Relative to Total Money Supply," NBER Books, National Bureau of Economic Research, Inc, number caga58-1.
- Panayiota Lyssiotou & Panos Pashardes & Thanasis Stengos, 2004. "Estimates of the black economy based on consumer demand approaches," Economic Journal, Royal Economic Society, vol. 114(497), pages 622-640, 07.
- Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-73, August.
- Sijbren Cnossen & Hans-Werner Sinn (ed.), 2003. "Public Finance and Public Policy in the New Century," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033046, June.
- Friedrich Schneider & Robert Klinglmair, 2004. "Shadow Economies around the World: What Do We Know?," CESifo Working Paper Series 1167, CESifo Group Munich.
When requesting a correction, please mention this item's handle: RePEc:hel:greese:31. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vassilis Monastiriotis)
If references are entirely missing, you can add them using this form.