TAX LOSS CAUSED BY THE INFORMAL ECONOMY AND METHODS OF FINDING

Abstract

Today, taxes are the most important source of income for countries, but the methods used to avoid paying taxes, especially the informal economy, appear as a problem that reduces this source of income. In fact, financial privacy indexes of countries are reported every year with the Tax Justice Network, which examines the vulnerability of countries with tax evasion in the global arena. The Organization for Economic Co-operation and Development (OECD) aims to prevent tax losses and evasion by preventing “tax havens” with the action plan Base Erosion and Profit Shifting (BEPS). Since the tax is the most important source of income of the state, its inability to collect or record it can cause problems in the financing of public services that the state has to offer. If tax losses are prevented, the financial difficulties that will be needed in the provision of services will be prevented without the need for a new tax rate increase in public revenues. This will both facilitate the financing of state investments and increase the welfare level of the society. In this study, the reasons that reveal the tax loss; In particular, the informal economy, the tax loss caused by the informal economy, the tax loss caused by the informal employment, which has an important place in the informal economy, and the tax base differences determined because of the examinations made by the tax inspectors will be examined in detail. A comparison of Turkey and European countries in terms of informal economy will also be included