BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Tax Evasion and Economies in Transition: Lessons from Tax Theory
Abstract: This study considers the pervasive tax evasion of
transition economies, with particular reference to Russia’s tax system.
Starting with a survey of theoretical literature on tax evasion and
corruption, it argues that, although standard tax theory offers many
insights, certain special features of transition economies deserve
attention. These include the legacy of socialism resulting in a state
willing to exercise discretionary power but possibly lacking credibility
and public support, the ‘disorganisation’ phenomenon that hampers efficient
tax administration, and the relationship of restructuring, speed of reform
and the tax system. The paper also contains recommendations on reform of
the tax system to achieve reasonable deterrence of evasion.
Keywords: tax evasion; corruption; transition economies; Russia; (follow links to similar papers)
43 pages, October 30, 1999
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