Taxation and the Shadow Economy : How the Tax System Can Stimulate and Enforce the Formalization of Business Activities

Awasthi, Rajul ; Engelschalk, Michael

World Bank, Washington, DC

关键词: SHADOW ECONOMY;    TAX ADMINISTRATION;    TAXATION;    FORMAL ECONOMY;    INFORMALITY;   

DOI  :  10.1596/1813-9450-8391
RP-ID  :  WPS8391

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Cash transactions for goods and servicesin which no receipts are issued greatly increase the risk oftax evasion. Despite the availability of banking servicesand alternative payment, key sectors of the economy remainlargely cash-based in almost all developing countries. Thispaper shows the apparent strong negative correlation betweenthe use of electronic or formal payments and the size of theshadow economy and reviews the approaches used by tax policymakers and administrators to achieve better control of cashtransactions. It argues that the many new and sometimesinnovative approaches developed to support the formalizationof cash transactions will have little impact on the shadoweconomy if applied in isolation. A successful strategy totax cash economy businesses and transactions requires aholistic approach to compliance management in whichtraditional monitoring and enforcement tools, such asenabling tax administrations to access taxpayer data andmatch information from various public and private sources,play a key role.