Identifying the Existing Connections Between Tax Evasion and Corruption and Determining a Functional Link Between the Two Phenomena
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| Pages: | 3 : 9 |
| 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. |
| JEL classification: | E26 |
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