Effects of Tax Evasion and Tax Policy on Economic and Social Environment: The Case of Bosnia and Herzegovina (original) (raw)
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Tax Evasion in Bosnia and Herzegovina: Perception from Taxpayers and Tax Inspectors
Eurasian Journal of Economics and Finance, 2020
Tax evasion is more of a disciplinary problem, produced by numerous, big and turbulent changes. The growing problems with tax evasion are present all over the world and they require a global solution of the problem. Although tax evasion is a global phenomenon, this is also the issue that most developed countries in the world are dealing with, there are significant differences between individual countries, all depending on the legal order, the entire social system and it is depending from country to country, and this is especially evident among transitioning countries. The problem of tax evasion is particularly acute in Bosnia and Herzegovina (hereinafter BiH). The main research result indicates that tax evasion has multiplicative effects; by reducing tax evasion, the situation in public finances improves substantially. This article discusses tax evasion in BiH and the perception of taxpayers and tax inspectors towards tax evasion. In this line, this article presents the theoretical analysis of the phenomenon of tax evasion (which is not a goal in itself), including the empirical analysis factors that have the greatest influence on tax evasion by using logistic regression modeling method. The paper checks the main hypothesis by identifying the factors that affect tax evasion and by determining their significance and impact, it is possible to construct logit model for determining factors of tax evasion in BiH.
Tax Evasion in Bosnia and Hercegovina and Business Environment
Procedia - Social and Behavioral Sciences, 2014
Global economic crisis and its consequences especially on the countries in transition has contributed to the trend of decreasing of economic activities, decreasing of employment and increasing the level of tax burden which is especially expresed in conditions of not favorably business environment. Tax evasion has been present in theory for many years, but in our practice until now it has not been significantly consideres and this is one of the research goals to answer what woud happen to total business and economic environment if we decided for radical fight against tax fraud with the goal of increasing public revenues on one side, and relief of economy and increasing of competitiveness both in the domestic and foreign markets, on the other side. Decreasing of tax frauds, before all, would positivly affect on the public sector in long-term perion because it would lead to growth and greater stability of public revenues (grater revenues of VAT as the most important tax form), would create conditions for new investment activity, which affected the growth of companies, and thus the overall growth of the economy.
Global economic crisis and its consequences especially on the countries in transition has contributed to the trend of decreasing of economic activities, decreasing of employment and increasing the level of tax burden which is especially expresed in conditions of not favorably business environment. Tax evasion has been present in theory for many years, but in our practice until now it has not been significantly consideres and this is one of the research goals to answer what woud happen to total business and economic environment if we decided for radical fight against tax fraud with the goal of increasing public revenues on one side, and relief of economy and increasing of competitiveness both in the domestic and foreign markets, on the other side. Decreasing of tax frauds, before all, would positivly affect on the public sector in long-term perion because it would lead to growth and greater stability of public revenues (grater revenues of VAT as the most important tax form), would create conditions for new investment activity, which affected the growth of companies, and thus the overall growth of the economy.
EURASIAN JOURNAL OF ECONOMICS AND FINANCE, 2020
Tax evasion is more of a disciplinary problem, produced by numerous, big and turbulent changes. The growing problems with tax evasion are present all over the world and they require a global solution of the problem. Although tax evasion is a global phenomenon, this is also the issue that most developed countries in the world are dealing with, there are significant differences between individual countries, all depending on the legal order, the entire social system and it is depending from country to country, and this is especially evident among transitioning countries. The problem of tax evasion is particularly acute in Bosnia and Herzegovina (hereinafter BiH). The main research result indicates that tax evasion has multiplicative effects; by reducing tax evasion, the situation in public finances improves substantially. This article discusses tax evasion in BiH and the perception of taxpayers and tax inspectors towards tax evasion. In this line, this article presents the theoretical analysis of the phenomenon of tax evasion (which is not a goal in itself), including the empirical analysis factors that have the greatest influence on tax evasion by using logistic regression modeling method. The paper checks the main hypothesis by identifying the factors that affect tax evasion and by determining their significance and impact, it is possible to construct logit model for determining factors of tax evasion in BiH.
Model for determining subjective and objective factors of tax evasion
Tax evasion is affected by many diverse subjective and objective factors. They are intertwined and determined as well as mutually connected and complementary. This paper is aimed at and orientated towards identifying the factors, both subjective and objective, that affect tax evasion in Bosnia and Herzegovina. The main research result indicates that tax evasion has multiplicative effects. It destroys the reputation of institutions primarily and, in particular, the reputation of the tax administration, it poses a threat to the tax system and rule of law, causing taxpayers distrust of the tax system itself. Thus, by reducing tax evasion the situation in public finances improves substantially. The paper shows the theoretical analysis of the phenomenon of tax evasion (which is not a goal in itself), including the empirical analysis of the subjective and objective factors that have the greatest influence on tax evasion in Bosnia and Herzegovina and the assessment of the amount of taxes evaded. 1 Herzegovina for a doctoral thesis " Model for determination of subjective and objective tax evasion factors " by intrant Saudin Terzic, under the mentorship of full-time professor PhD Aleksandar Stojanović. Model for determining subjective and objective factors of tax evasion 1 Model determinacije subjektivnih i objektivnih faktora porezne evazije Sažetak Na poreznu evaziju utječu svojom isprepletenošću i determiniranošću brojni subjektivni i objektivni čim-benici, a svi čimbenici porezne evazije su uzajamno povezani i nadopunjujući. Cilj i svrha ovog rada je identifikacija subjektivnih i objektivnih čimbenika, koji utječu na poreznu evaziju u Bosni i Hercegovini. Osnovni rezultat istraživanja ukazuje da porezna evazija ima multiplikativno djelovanje, narušava ugled, prije svega institucija, posebno porezne administracije, ugrožava porezni sustav i načela pravne države, uzrokujući nepovjerenje, prije svega poreznih obveznika u sam porezni sustav te se smanjenjem porezne evazije, značajno poboljšava stanje u javnim financijama. U radu je prikazana teorijska analiza fenomena porezne evazije (koja nije sama sebi cilj), s empirijskom analizom subjektivnih i objektivnih čimbenika koji najviše utječu na poreznu evaziju u Bosni i Hercegovini, s procjenom visine porezne evazije. Ključne riječi: porez, porezna evazija, porezni sustav, porezna administracija, porezno opterećenje i porezna stopa, korupcija
Tax Evasion, Prevention Measures and Detection Procedures - The Case of the Republic of Serbia
Proceedings of the 7th International Scientific Conference - FINIZ 2020, 2020
The subject of research is to determine the knowledge and understanding of the importance of tax evasion (TE) and prevented measures in the Republic of Serbia. The main findings of executed research in 2019 were: 1) the majority of respondents were aware of TE, 2) working illegally is the most common way of TE, 3) the majority of respondents said that they hadn't received the bill after every shopping, 4) all respondents stressed that some party should be penalized for not possessing the bill after shopping, 5) the majority of respondents answered that adequate tax propaganda was the way of educating tax payers, 6) the majority of respondents would not report any notice of any form of TE. The state and tax authorities should take measures in order to create win-win climate for all stakeholders in order to reduce TE.
Tax Evasion and its Effects on the Economy
JMC Research Journal, 2019
Tax evasion happens when individuals, organization or agency purposely do not adhere to their tax obligation. The loss of tax revenue caused by tax evasion seriously hampers the proper functioning of the public sector by creating problems in its ability to finance its expenses. The study investigates the opinion of the tax professionals regarding the tax evasion in Nepal with the focus on the factors responsible for the tax evasion and possible remedies to decrease the problem of tax evasion. The main objective of the study is to identify the causes of income tax evasion and assess the impact of tax evasion in Nepal. To collect the information regarding tax evasion in Nepal a well-designed questionnaire with five-point Likert scale has been used. Their opinion reveals that high tax rates, corruption in public sector units, multiple tax rates and inefficient tax authorities are the main causes of tax evasion in Nepal.
Economic-Political Causes of Tax Evasion (Theoretical Background)
Optimization of Organization and Legal Solutions concerning Public Revenues and Expenditures in Public Interest (Conference Proceedings), 2018
This paper is focused on tax issues, with an emphasis placed on the identifi cation of primary causes of the economic-political nature of the emergence of tax evasion and non-compliance with tax obligations. The aim of the Authoresses is to provide in the context of this paper a brief overview of the economic-political background leading to detection of the real causes of the emergence and existence of tax evasion and non-compliance with tax obligations. In carrying out complex analysis of the causes leading to the emergence of tax evasion and non-compliance with tax obligations, it is necessary to also accept the nature of non-economic determinants. Instability or turbulence of the conditions in the context of the economic milieu (e.g., frequent changes in the tax code) signifi cantly increase the complexity of the disclosure of the real underlying cause of tax evasion and non-compliance with tax obligations. The apparent underlying cause of the emergence and existence of tax evasion is inherently taxation, that is, the introduction of taxes as such and the obligation to pay them. The decisive factors leading to the creation of tax evasion and non-compliance with tax obligations include the factors of economic-political 1 This paper has been written as a partial output of the APVV-16-0160 research project, Tax evasions and tax avoidance (motivation factors, formation and elimination), as well as the output of the VEGA 1/0375/15 research project, Tax evasion and tax frauds and possibilities of their prevention (by means of tax law, commercial law and criminal law). 2 Doctor, Researcher at Pavol Jozef Šafárik University in Košice, Faculty of Law. Within her research and teaching activities, she pays special attention to assorted micro-and macroeconomic issues from the interdisciplinary perspective. She is the author of more than 80 reviewed scientifi c outputs in the form of articles in journals, chapters in monographs, conference papers. She is a member of the Information and Organization Centre for Research into Public Finances and Tax Law in the Countries of Central and Eastern Europe.
The Ethics of Tax Evasion: A Survey of Bosnian Opinion
SSRN Electronic Journal, 2000
Very little has been written about tax evasion from an ethical perspective. Most of the prior research explores the public finance and policy implications of tax evasion. This study investigates the ethics of tax evasion utilizing a survey instrument consisting of 18 statements. These statements represent the predominant issues and viewpoints that have emerged regarding tax evasion in the Western philosophical and theological literature over the past 500 years. This study explores the acceptance of these Western arguments related to tax evasion among business and economics students at the University of Sarajevo in Bosnia. Results indicate that the belief that tax evasion is ethical is not widespread among the Bosnian students. However, their responses to the survey indicate that tax evasion is frowned upon in some cases more than others and that the attitude toward tax evasion differs depending upon the issue.
An Estimate of Tax Evasion in Croatia
The definition of the underground economy in this work is a legal economic activity that is not reported for the purpose of avoiding the payment of taxation; the tax defaulter thus increasing his own personal benefit. Tax evasion is an unlawful manner of reducing the tax liability: for example, underreporting the income made or by stating inflated business deductions. In the case of tax avoidance, however, the taxpayer simply makes use of the opportunities provided in the law for the reduction of his or her tax liability. The consequence of an increase in evasion is the erosion of the tax base. A shortfall in revenue collected will result in a deficit that can be financed either by a further increase in taxation, which ultimately deepens the size of the underground economy and the inclination to evasion, or by borrowing, placing an extra burden on future taxpayers. The stability of the tax system is an important factor in the reduction of tax evasion. The transitional environment, h...