Tax evasion and the shadow economy in Hungary
Tax evasion and the shadow economy in Hungary

Summary/Abstract: The fight against the shadow economy and tax evasion is among priority policy objectives in most developed countries. In addition to causing significant budget revenue shortfalls, the shadow economy and tax evasion distort the quality of statistics and market competition. Based on the theoretical and empirical literature, this paper presents the underlying reasons behind the shadow economy and estimates on the size of the shadow economy in Hungary. Furthermore, it draws conclusions on the whitening effects of recent policy measures, based on the most recent statistics of the National Labour Office and the retail sales statistics.

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