Informal Economy and VAT

Małgorzata Sęk

doi:10.18778/1509-877X.01.03

Authors

Małgorzata Sęk University of Lodz (Poland), Centre of Tax Documentation and Studies, Faculty of Law and Administration, Tax Law Department

DOI:

https://doi.org/10.18778/1509-877X.01.03

Keywords:

VAT fraud, VAT evasion, informal economy, shadow economy, grey economy, anti-fraud measures, anti-evasion measures, unregistered business activities

Abstract

The aim of this paper is to discuss the interconnections between informal economy and Value Added Tax (VAT), as well as measures applied in the European Union (EU) Member States and other countries to counter VAT evasion and VAT fraud related to informal economy. It is shown in the article, that VAT and informal economy are strongly interconnected. VAT may be the cause for growth of the informal economy. But on the other hand, some VAT-related measures may be introduced to reduce or at least stop further growth of informal economy. Examples of such measures conclude the findings.

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