SHADOW ECONOMY AND ITS RELATIONS WITH TAX SYSTEM, BUDGET DEFICIT AND MACROECONOMIC INDICATORS

Abstract

The paper analyzes the influence of the shadow economy on the tax system, state budget and a number of macroeconomic parameters of Ukraine such as poverty, income levels, corruption, GDP per capita, public debt, budget violations etc. The results of our research show that level of corruption, monopolization and budget violations are considered key factors that stimulate the shadowing of the economy. On the other hand, a number of researchers state that the average wage level is a strong destimulating factor for the shadow economy. The analysis given uncovers a robust relationship between the corruption and the size of the shadow economy when perceptions-based indices of corruption are used.

Keywords

• state budget
• public sector
• shadow economy
• shadow processes
• level of corruption
• state budget
• public debt