Hidden economy and tax evasion in Bulgaria - a study of public opinion

Abstract

Hidden economy and tax evasion are major issues for most emerging economies, including for countries in Eastern and Southeastern Europe. The resulting lack of tax income could lead to growing public debt, inadequate public services and respectively to problems with future growth prospects. Our study tries to shed more light on the public perception of the issue in Bulgaria. We explore the existing opinions with a survey, and base our conclusions on 1398 valid responses of people between the age of 18 and 60, mostly from Northeastern and Eastern Bulgaria. We have found that perceptions of existing tax fraud, tax evasion and the scope of hidden economy are rather high. There are only few significant differences between the answers from the two years studied - 2017 and 2018, as well as among different types of respondents (sex, education, employment etc.). We consider the existing situation as relatively stable, our respondents' opinion about tax evasion and hidden economy can be assessed as consistent.

Keywords

• fiscal policy
• tax administration
• tax evasion
• informal sectors
• tax avoidance