Hunting the Shadows – Tax Evasion Dynamics in Macedonia
Лов на сенки - динамиката на даночното затајување во Македонија
According to estimates in 2013 the European Union lost around 1 trillion EUR in public revenues annually due to tax evasion and fraud.Given that EUs’ GDP summed up to 12.7 trillion EUR in 2013, tax evasion and fraud represented 7.9% of its annual GDP. As a middle-income country, which is still reforming ist tax authority, tax system and related measures against tax evasion and fraud, one can reasonably assume that Macedonia should expect at least a similar rate to GDP of tax evasion and fraud (7.9%) or at least 700 mln. EUR on an annual basis.On the one hand, it negatively affects the competitive position of the companies that pay their taxes vis-a-vis the ones that evade taxes. On the other hand, it affects all citizens, as it undermines the everyday functioning of public services, (like healthcare, education, security, infrastructure etc.), which otherwise would have had better quality and extent. Furthermore, lost income through tax evasion and fraud affects the most, exactly the most vulnerable groups in the society by having fewer resources for social protection and social benefits programs.Tackling tax evasion and fraud, being just a part of the policies targeting hidden economic activities, is not just a way to increase government revenues, but also a way to increase the fairness of the tax system, and improve tax acceptance and trust among its citizens and businesses, promote human rights, and enable appropriate protection to the most vulnerable in the Macedonian society.
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