Formalizing the Shadow Economy in Serbia : : Policy Measures and Growth Effects.

• Superior document: Contributions to Economics Series
• Author: Krstić, Gorana.
• TeilnehmendeR: Schneider, Friedrich.
• Place / Publishing House: Cham : : Springer International Publishing AG,, 2015.; {copy}2015.
• Year of Publication: 2015
• Edition: 1st ed.
• Language: English
• Series: Contributions to Economics Series
• Physical Description: 1 online resource (182 pages)

Table of Contents

• Intro
• Preface
• Contents
• Contributors
• Chapter 1: Introduction
• 1.1 Introduction
• Reference
• Chapter 2: The Shadow Economy: Challenges to Economic and Social Policy
• 2.1 Features of the Shadow Economy
• 2.2 Brief History of the Shadow Economy in Serbia
• References
• Chapter 3: The Concept of the Survey of Businesses and Entrepreneurs Operating Informally
• 3.1 Aim and Content of the Survey
• 3.2 Research Methodology
• 3.2.1 Definition of `Shadow Economy ́Used in the Survey
• 3.2.2 Sample
• 3.3 Basic Information on the Business Entities Surveyed
• References
• Chapter 4: Causes of the Shadow Economy
• 4.1 Causes of the Shadow Economy Rooted in the Tax System
• 4.1.1 The Size of the Tax Burden
• 4.1.2 The Fiscal Burden on Labour
• 4.1.3 The Social Welfare System
• 4.1.4 The Efficiency of the Tax Administration in Collecting Taxes
• The Shadow Economy and Use of State Services Free of Charge
• 4.1.5 The Penalties for Tax Evasion
• 4.1.6 The Probability of Sanctions
• 4.1.7 The Structure of the Tax System
• 4.1.8 The Complexity of the Tax System
• 4.1.9 The Fairness of the Tax System
• 4.1.10 Tax Compliance Costs
• 4.2 Labour Market Institutions as an Incentive to the Shadow Economy
• 4.2.1 Minimum Wage
• 4.2.2 Working Hours
• 4.2.3 Employment Protection Legislation
• 4.2.4 Unemployment Benefits
• 4.2.5 Retirement Rules
• 4.3 Other Institutional and Economic Causes of the Shadow Economy in Serbia
• 4.3.1 Low Productivity
• 4.3.2 Economic Crisis and Widespread Lack of Liquidity
• 4.3.3 Inefficient Market Exit
• 4.3.4 High Administrative Burden
• 4.3.5 Poor Regulatory Environment and Legal Insecurity
• 4.3.6 Construction Permit Issues for Existing Buildings (`Legalisation)́ and New Construction
• 4.3.7 Quality of Public Services
• 4.3.8 High Levels of Corruption.
• 4.3.9 High Tolerance for the Shadow Economy by the Government
• 4.3.10 Large Number of Small Business Entities
• 4.3.11 The Structure of the Populationś Income
• 4.3.12 A High Unemployment Rate
• 4.3.13 Tax Morality
• 4.4 Incentives from the Financial Sector
• 4.4.1 Cash Transactions
• 4.4.2 Informal Finance
• 4.4.3 Unregistered Remittances Sent by Migrants from Abroad
• References
• Chapter 5: What Is the Extent of the Shadow Economy in Serbia?
• 5.1 Introduction
• 5.2 Estimate of the Shadow Economy Using the MIMIC Method
• 5.2.1 Introduction
• Definition of the Shadow Economy
• 5.2.2 The MIMIC Model Approach
• 5.2.3 Econometric Results and Their Interpretation
• 5.3 Estimate of the Shadow Economy Using the Household Tax Compliance Approach
• 5.4 Estimate of the Shadow Economy Based on the Survey on Conditions for Doing
• 5.4.1 Business in Serbia
• 5.4.2 Estimated Extent of the Shadow Economy in the Trade in Goods
• 5.4.3 Estimated Extent of the Shadow Economy in the Payment of Wages
• 5.4.4 Summary Estimate of the Shadow Economy in the Sector of Businesses and Entrepreneurs
• 5.5 Estimate of the Tax Evasion Gap
• 5.5.1 Introduction
• 5.5.2 Estimate of the VAT Gap
• 5.5.2.1 Estimating the VAT Gap Based on Macroeconomic Aggregates
• Methodology for Estimating the VAT Gap
• Estimation of the VAT Gap in Serbia
• The VAT Gap and Registered GDP
• 5.5.3 Estimated Personal Income Tax and Social Security Contributions Gap
• Shadow Economy, Tax Evasion, and the Tax Gap
• Appendix
• References
• Chapter 6: Shadow Economy in the Business and Entrepreneurial Sectors
• 6.1 Assessment of Main Types of the Shadow Economy and Their Characteristics
• Definition of the Shadow Economy and Informal Employment in the Survey on Conditions for Doing Business in Serbia
• 6.2 Determinants of Participation in the Shadow Economy.
• 6.3 Effects of Competition from the Informal Sector
• 6.3.1 Competition from the Informal Sector
• 6.3.2 Effects of Competition from the Informal Sector
• 6.3.3 Types of Informal Operation
• References
• Chapter 7: Effects of Formalisation of the Shadow Economy
• 7.1 Fiscal Implications of Formalisation of Shadow Economy
• 7.1.1 Estimate of Possible Fiscal Effects with Respect to VAT
• 7.1.2 Estimate of Possible Fiscal Effects with Respect to Personal Income Tax and Social Contributions
• 7.2 Effects of Formalising the Shadow Economy on Economic Growth
• References
• Chapter 8: Analysis of the Administrative Capacity of the Institutions in Charge of Overseeing the Operations of Business Enti...
• 8.1 Introduction
• 8.2 Tax Administration
• 8.3 Labour Inspection
• 8.4 Market Inspection
• References
• Chapter 9: Main Findings and Recommendations
• 9.1 Main Findings
• 9.1.1 Causes of the Shadow Economy
• 9.1.2 Estimates of the Extent of the Shadow Economy and Tax Gap
• 9.1.3 The Shadow Economy in the Business and Entrepreneur Sector
• 9.1.4 Estimated Impact of Formalising the Shadow Economy
• 9.1.5 The Administrative Capacity of Institutions Tasked with Overseeing Business: Labour Inspectorate, Market Inspectorate, a...
• 9.2 Recommendations for Formalising the Shadow Economy
• 9.2.1 Strategy for Formalising the Shadow Economy
• 9.2.2 Fiscal Policy Measures
• Reducing Distortions Introduced by Taxes
• Reduce Tax Compliance Costs
• Reduce the Return to Tax Evasion
• Increase Tax Morals
• Reduce Tolerance for the Shadow Economy
• Encourage Taxpayers to Settle Reported Tax Liabilities Fully and on Time
• Abandon the Practice of Writing off Interest for Late Payment of Taxes
• Improve the Quality of Services Provided by the Government.
• Educate the Public About the Importance and Value of Services Provided by the Government
• 9.2.3 Measures Relating to Features of the Labour Market
• Taxation of Labour
• Minimum Wage Regulation
• Working Hours Regulation
• Employment Protection Legislation
• Retirement Rules
• Welfare Benefits
• Specific Measures Targeting Informal Employment
• Recommendations for Improving the Efficiency of the Labour Inspectorate in Tackling Undeclared Work
• Recommendations for Improving the Efficiency of the Market Inspectorate in Tackling the Shadow Economy
• 9.2.4 Measures Relating to the Financial Sector
• Curb Transactions in Cash and Incentivise Cashless Payments
• Formalise Remittances from Abroad Transferred Through Informal Channels
• 9.2.5 Measures Related to the Business Environment
• Measures Aimed at Business Entities Operating Partially in the Shadow Economy
• Resolve the Issue and Consequences of `Phoenix Companies ́-- Impose Barriers to the Introduction of New Administrative Burdens by Requiring the Application of the SME Test and the Standar...
• Simplify Regulatory (Administrative) Requirements
• Regulate the Public Consultation Process
• Adopt Bylaws in a Timely Fashion
• Improved Protection from Unfair Competition
• Measures Directed at Business Entities Operating Wholly in the Informal Economy
• Establish an E-Portal for Licences, Permits, Approvals, and Consents
• Remove Barriers to Entry in Particular Sectors
• Establish an Authoritative Registry of Legislation Accessible to the Public Free of Charge
• Construction Permits and `Legalisation ́-- 9.2.6 Outreach Campaigns
• References
• Chapter 10: Executive Summary
• 10.1 Main Findings of the Study
• 10.1.1 Survey of the Informal Activities of Serbian Businesses and Entrepreneurs
• 10.1.2 Causes of the Shadow Economy.
• 10.1.3 Extent of the Shadow Economy in Serbia
• 10.1.4 Estimates of the Tax Evasion Gap
• 10.1.5 The Shadow Economy in the Business and Entrepreneur Sector
• 10.1.6 Effects of Formalising the Shadow Economy
• 10.2 Recommendations for Formalising the Shadow Economy
• 10.2.1 Fiscal Policy Measures
• 10.2.2 Measures Relating to Features of the Labour Market
• 10.2.3 Measures Relating to the Financial Sector
• 10.2.4 Measures Related to the Business Environment
• 10.3 Policy Conclusions
• References
• About the Author.