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Estimation of a Tax Gap in the Personal Income Tax by Means of National Accounts

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  • Savina Finardi
  • Alena Vančurová

Abstract

The article deals with the estimation of a tax gap incurred by devastation of a tax base and concentrates on undervaluation of incomes from an independent activity. The distortion rate was estimated by means of database data from national accounts; the database is internationally comparable. The authors built on indexes that monitor production and intermediate consumption in monitored economies and which are similar to the Czech Republic in some aspects - this concerns Slovakia, Sweden and Austria. Based on these calculations, real tax bases of people with incomes from an independent activity were set. The result of our paper is a total tax gap in the Czech Republic in 2011 and it is CZK 4,6bn - it is such a gross estimation of uncollected collection into public budgets for 2011.

Suggested Citation

  • Savina Finardi & Alena Vančurová, 2014. "Estimation of a Tax Gap in the Personal Income Tax by Means of National Accounts," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2014(2), pages 66-78.
    • Handle: RePEc:prg:jnlefa:v:2014:y:2014:i:2:id:120
    DOI: 10.18267/j.efaj.120
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    References listed on IDEAS

    as
    1. Khwaja, Munawer Sultan & Iyer, Indira, 2014. "Revenue potential, tax space, and tax gap : a comparative analysis," Policy Research Working Paper Series 6868, The World Bank.
    2. Mazur, Mark J. & Plumley, Alan H., 2007. "Understanding the Tax Gap1," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(3), pages 569-576, September.
    3. Ali Taiebnia & Shapour Mohammadi, 2008. "Underground Economy and Tax Gap," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 13(2), pages 1-29, fall.
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    Cited by:

    1. Savina Finardi & Michal Procházka, 2016. "Discussion of Methods Estimating the Tax Gap in the Czech Republic [Diskuze odhadů daňové mezery v České republice]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2016(4), pages 99-108.

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    More about this item

    Keywords

    Czech Republic; National Accounts; Personal Income Tax; Tax Gap;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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