Tax evasion and its implications on country-level tax revenue structure

• Název práce v češtině: Daňové úniky a jejich důsledky na strukturu daňových příjmů na úrovni země
• Název v anglickém jazyce: Tax evasion and its implications on country-level tax revenue structure
• Klíčová slova: Daňové úniky, Daňové ráje, Struktura daňových příjmů, Offshore bohatství, Model fixních efektů, Daň z příjmu, Daň z kapitálových zisků, Daň z nemovitosti
• Klíčová slova anglicky: Tax evasion, Tax havens, Tax revenue structure, Offshore wealth, Fixed effects model, Income tax, Capital gains tax, Property tax
• Akademický rok vypsání: 2021/2022
• Typ práce: bakalářská práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: Mgr. Evgeniya Dubinina
• Řešitel: skrytý - zadáno a potvrzeno stud. odd.
• Datum přihlášení: 20.03.2023
• Datum zadání: 20.03.2023
• Datum a čas obhajoby: 10.09.2024 09:00
• Místo konání obhajoby: Opletalova, O206, místnost. č. 206
• Datum odevzdání elektronické podoby: 27.07.2024
• Datum proběhlé obhajoby: 10.09.2024
• Oponenti: PhDr. Miroslav Palanský, Ph.D.

Seznam odborné literatury

Alstadsæter, A., Johannesen, N., Le Guern Herry, S., & Zucman, G. (2022). Tax evasion and tax avoidance. Journal of Public Economics, 206. https://doi.org/10.1016/j.jpubeco.2021.104587

Alstadsæter, A., Johannesen, N., & Zucman, G. (2018). Who owns the wealth in tax havens? Macro evidence and implications for global inequality. Journal of Public Economics, 162. https://doi.org/10.1016/j.jpubeco.2018.01.008

Alstadsæter, A., Johannesen, N., & Zucman, G. (2019). Tax evasion and inequality. American Economic Review, 109(6). https://doi.org/10.1257/aer.20172043

Cobham, A. (2005). Tax evasion, tax avoidance and development finance. QEH Working Paper Series, 129(129).

EY. (2024). The outlook for global tax policy and controversy in 2024. Ernst & Young Global. https://www.ey.com/en_gl/tax-alerts/2024-0689-the-outlook-for-global-tax-policy-and-controversy-in-2024.

Fuest, C., & Riedel, N. (2009). Tax evasion, tax avoidance and tax expenditures in developing countries: A review of the literature. Report Prepared for the UK Department for International Development (DFID), 44(Oxford
University Centre for Business Taxation).

García Carrillo, J. F., Parra Jiménez, O. D., & Rueda Céspedes, F. (2021). Features of tax structure and tax evasion in Colombia. Apuntes Contables, 28. https://doi.org/10.18601/16577175.n28.02

Johannesen, N., & Zucman, G. (2014). The end of bank secrecy? An evaluation of the G20 tax haven crackdown. American Economic Journal: Economic Policy, 6(1 B). https://doi.org/10.1257/pol.6.1.65

MACHARIA, J. K. (2014). The Effect of Tax Evasion on Tax Revenues in Kenya. Master of Business Administration, University of Nairobi, 2014. http://erepository.uonbi.ac.ke/handle/11295/74731#:~:text=The%20study%20established%20that%20the,affects%20tax%20revenue%20in%20Kenya.

Mehrara, M., & Farahani, Y. G. (2016). The study of the effects of tax evasion and tax revenues on economic stabilities in oecd countries. World Scientific News, 33.

Ozili, P. K. (2020). Tax evasion and financial instability. Journal of Financial Crime, 27(2). https://doi.org/10.1108/JFC-04-2019-0051

OECD (2023), Tax Policy Reforms 2023: OECD and Selected Partner Economies, OECD Publishing, Paris, https://doi.org/10.1787/d8bc45d9-en.

Pellegrini, V., & Tosti, E. (2017). What do External Statistics tell us About Undeclared Assets held Abroad and Tax Evasion? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2917184

Partington, R. (2024, February 29). ‘A historic step’: G20 discusses plans for global minimum tax on billionaires. The Guardian. https://www.theguardian.com/news/2024/feb/29/taxation-worlds-billionaires-super-rich-g20-brazil

'UNU-WIDER Government Revenue Dataset’. Version 2023. https://doi.org/10.35188/UNU-WIDER/GRD-2023.

Vellutini, C., Casamatta, G., Bousquet, L., & Poniatowski, G. (2019). Estimating International Tax Evasion by Individuals. In Taxation Papers.

Zucman, G. (2013). The missing wealth of nations: Are europe and the U.S. net debtors or net creditors? Quarterly Journal of Economics, 128(3). https://doi.org/10.1093/qje/qjt012

Zucman, G., Fagan, T. L., & Piketty, T. (2015). The Hidden Wealth of Nations. In The Hidden Wealth of Nations. https://doi.org/10.7208/chicago/9780226245560.001.0001

Předběžná náplň práce v anglickém jazyce

Research question and motivation

In this thesis I will research how losses from tax evasion affect the tax revenue structure. Tax evasion is a worldwide issue, according to Zucman (2013), there was a difference of $4.5 trillion in the global portfolio gap, meaning that many countries were left without valuable tax revenue due to tax evasion, as well as profit-shifting by multinationals. Furthermore, a more recent study (Alstadsæter, Johannesen, and Zucman 2019) estimated that tax evasion in 2018 was $8.3 trillion. The burden of tax evasion falls on developing countries, it also increases income inequality, and it reduces the tax revenue collected by governments globally. Therefore, it is important to try and find ways to reduce or minimize tax evasion as much as possible, in order to decrease inequality and increase the quality of life for people worldwide.

These studies show us the extent of tax evasion globally, however there is a lack of research that links tax evasion to tax structure. Thus, that is that this study will focus on. By using previous literature, it is possible to collect data on the amount of tax evasion recorded in 37 countries for the 2001-2016 period. This panel data will be analyzed with other variables include: tax rates, the logarithm of GDP per capita, the logarithm of population, and the FDI inward stock as a %GDP) that will give a good estimate on how much tax evasion affects tax structure in these countries. Understanding how losses from tax evasion may affect tax structure, could be significant to explain why individuals from certain countries choose to evade taxes. The research question will be answered by doing a fixed effects regression with the collected data.

Contribution
Previous research has not, particularly, been focused on how tax evasion could impact tax structure. We have seen many papers in the past that shed light on the consequences of tax havens, and their impact on inequality and such, but none have been concerned with how evasion losses may affect tax structures in countries. However, these previous studies have enabled us to focus on some rather specific issues concerning tax havens that could be worth investigating. Therefore, this study will try to interpret how losses from tax evasion affect country-level tax revenue structure.

Methodology
The taxation papers published by the European Commission (Vellutini et al. 2019) have combined previous research by Zucman (2013); Pellegrini, Sanelli and Tosti (2016); and Alstadsæter, Johannesen and Zucman (2018) to estimate offshore wealth by country. They do this for the EU-28, OECD, and some non-OECD countries in the period from 2001 to 2016. The analysis will be based on panel data, and other variables such as: tax rates, the logarithm of GDP per capita, the logarithm of population, and the FDI inward stock as a %GDP. So, the amount of tax evasion per year, by each country, along with the other variables mentioned will be used in the fixed effects regression model. The data for tax structure will be collected from KPMG, while the other variables will be collected from the World Bank database.

Outline

Abstract
Introduction
a) Consequences of tax havens to countries worldwide
b) Introduction to research question
Literature review
a) Explanation of literature used
b) Implications of previous literature on my work
Methodology
a) Relevant description of data
b) Explanation of the variables used
c) How the tests will be performed
Results
a) Interpretation of the results, and comments
b) Possible limitations
Conclusion
a) Further interpretations of the results
b) Implications for practice
c) Summary