TAX EVASION THROUGH FICTITIOUS ECONOMIC OPERATIONS, OBSTACLE TO SUSTAINABLE DEVELOPMENT

Abstract

Tax evasion means the avoidance of declaring and paying taxes. The purpose of the research is to identify ways and mechanisms of tax evasion through fictitious economic operations and how this kind o tax evasion can influence sustainable development. The principal methods are researching tax evasion cases investigated by the Romanian authorities responsible for combating this phenomenon, court trials on tax evasion and using the bibliographic references in the field. The data used are obtained through open sources of the authorities specialized in combating tax evasion for the cases made public, the media and also from specialised literature. The principal results are that this type of tax evasion is manifested through transactions with “ghost companies”, with offshore companies and transactions between associated enterprises. The main causes of this problem are: high taxation, corruption, inefficient government and tax authorities, no fiscal education and very hard tax legislation. The consequences are that the state budget is affected, the companies that do business legally are affected and also the final consumers, so Romania will not have economic growth and the quality of life will not improve. The main conclusion is that in order to have sustainable development, tax evasion in general and this kind of tax evasion in particular must be eradicated. The measures that have to be taken are to prevent tax evasion and to tighten controls but without violating taxpayers rights and without making abuses

Keywords

• tax evasion
• fictitious economic operations
• ghost companies
• offshore companies
• associated enterprises
• sustainable development