ANALYSIS OF THE SHADOW ECONOMY AND ITS FISCAL EFFECTS IN UKRAINE

Pavlo Pirnykoza

Abstract


This article analyses the share of shadow economy in Ukraine and its effects on the domestic fiscal sphere. It was made an attempt to calculate the approximate tax losses, which was resulted by the informal sector of economy. Also, we tried to search the influence of the shadow economy on the consolidate budget revenue, expenditures and deficit. The results of this paper are: 1) the level of the shadow economy in Ukraine during last 5–10 years is between 34–43 % of GDP; 2) the annual average tax losses are about 15.4 % of official GDP, of which 10.4 % is the losses of central and local budgets, 5.0 % is the losses of Ukrainian Pension Fund; 3) it was empirically proven the influence of the shadow economy on the amount and the structure of expenditures of Consolidated Budget of Ukraine. We found strong support that the bigger size of informal sector leads to the reduction of the capital expenditures’ share in the general expenditures of Consolidated Budget of Ukraine.
JEL Code: E620, O170, H260, H200, C 100.

Keywords


shadow economy; tax losses; consolidated budget; tax revenue; budget expenditure; budget deficit; tax ratio; Ukraine

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References


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DOI: http://dx.doi.org/10.21303/2504-5571.2018.00577



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