Best Practices for Reducing the Informal Sector of the Economy Through Tax Measures

Abstract

he article summarizes the key ideas reflected in the reports of international organizations, scientific literature, as well as the experience of foreign countries on the use of tax measures to reduce the size of the informal sector of the economy. The experience of different countries is used to illustrate the features of individual measures. The choice of countries is primarily related to the extent to which their experience is relevant for the purpose of analysis. Therefore, the authors are not li­mited to the OECD and CIS countries, but also consider the experience of other countries where the size of the informal sector of the economy is especially large and where legislators are making attempts to reduce the informal economy sector including the BRICS countries and Latin American countries. The study found that foreign countries have accumulated extensive tax tools to combat the «shadow» economy. The main one is to reduce the tax burden on economic entities in order to get out of the shadows. Promising directions of its improvement are formulated.