O17 - Formal and Informal Sectors; Shadow Economy; Institutional ArrangementsReturn

Taxes and other charges that are paid secure the economic existence of national and public budgets and funds. If a tax debtor refuses to consent to or pay their state tax, the state will not let this act go unpunished. While the issue of tax enforcement through taxation or the execution of insolvency proceedings is a highly interesting topic, it is also a huge and extremely sensitive and topical issue. Tax arrears have emerged within our economy and will continue to increase. Likewise, it is also known that the number of insolvency executions ordered for these non-payers is on the rise. This review focuses on the field of tax enforcement and defines the current position. The objective of this paper is to create the basis for further research into the effectiveness of enforcement instruments.

Which method of estimating the shadow economy is the best for the Czech Republic? To answer this question, it is necessary to compare the various existing methods and summarize the benefits and constraints of the individual approaches. At first, direct and indirect methods of estimating the shadow economy are described and various studies quantifying the shadow economy and tax gaps using different methods are mentioned. For each method, the advantages and drawbacks are explained based on the opinions of acknowledged authors engaged in the research in this area. Eventually, the models are compared and assessment methods for the shadow economy are recommended for different purposes depending on the intended use of the resulting estimates. In the conclusion, the partial statistical methods which can be combined to give a total assessment of the shadow economy as well as the indirect discrepancy method for calculating the VAT gap are suggested for the Czech Republic.