GRiSSH::Αρχείον οικονομικής ιστορίας | Vol.XXVIII, No.1, 2016 | The adoption of International Financial Reporting Standards (IFRS) and International Standards of Auditing (ISA) is required to fight shadow economy repercussions

Information

The adoption of International Financial Reporting Standards (IFRS) and International Standards of Auditing (ISA) is required to fight shadow economy repercussions

Part of : Αρχείον οικονομικής ιστορίας ; Vol.XXVIII, No.1, 2016, pages 77-93

Issue:

Vol.XXVIII, No.1, 2016

Pages:

77-93

Author:

Abstract:

Shadow economy and lack of transparency reduce the overall country’s tax revenues. Hence, the legal (honest) households and corporations usually bear the tax burden. Besides, high taxation is an obstacle for economic growth. In the present article an effort will be made to point out with panel data that shadow economy causes a higher effective tax rate. This distortion takes place at a greater extent in southern EU. Our sample covers annually Austria (2001-2013), Belgium (2001-2013), Cyprus (2005-2013), Denmark (2001-2013), Finland (2001-2013), France (2004-2013), Germany (2001-2013), Greece (2001-2013), Ireland (2001-2013), Italy (2001-2013), Netherlands (2001-2013), Portugal (2001-2013), Spain (2001-2013), Sweden (2001-2013) and UK (2001-2013). To fight this distortion and to increase transparency, countries should adopt the IFRS and ISA, which will cause eventually economic growth.

Subject:

Economics and Business

Subject (LC):

Economics

Keywords:

shadow economy, tax evasion, economic growth, panel data analysis

Notes:

JEL Classifications: E26; O17; C33

References (1):

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