Abstract:

The aim of this study is to identify the most influential factors of the tax gaps in the economy. This work empirically investigates direct and indirect relations between the economic, social and institutional indicators of the country’s development and tax gaps volume. Based on the panel data regression models, groups of indicators, which have a linear and non-linear relationship with tax gaps, have been defined. The degree of factorial features impact on the resulting indicator was analyzed in terms of the following groups of countries: developing countries, countries, included to OECD, G20, G7. According to the analysis, it was defined that there is no statistically significant relationship between the level of labor migration, life expectancy, civil liberties level and tax gaps. The scientific contribution of the article consists in the fact that the current studies regarding the impact of the countries’ economic and social development indicators, their institutional constituent on the number of tax gaps, are fragmentary. The established inter dependence can provide the best consideration of the most influential factors of tax evasion and promotion to increase the effectiveness of measures to stimulate economic actors to withdraw funds from the shadow.