Abstract
Reducing tax evasion has been among the top priorities of the Greek public administration especially during the last years of the economic recession. The purpose of this study is to examine the level of tax evasion of Greek small and micro firms and how it is affected by the inefficiency of the Public Administration, the negative economic environment and various negative psychological factors. We examine different economic sectors but focus on the retail sale of goods and services. The research hypotheses, regarding the relationship between tax evasion and the above factors are tested through a multiple linear regression model developed for this study. Factor analysis was used to construct the variables used in our model. Our results show that tax evasion is positively affected by the inefficiency of public administration in determining the appropriate rate of tax, in simplifying the complexity of laws and establishing an effective justice system. Finally, the hypothesis regarding the relationship between tax evasion and economic factors is rejected while the hypothesis regarding the relationship between tax evasion and psychological factors is marginally accepted.
Highlights
Reducing tax evasion has been among the top priorities of the Greek public administration especially during the last years of the economic recession
The purpose of this study is to examine the level of tax evasion of Greek small and micro firms and how it is affected by the inefficiency of the Public Administration, the negative economic environment and various negative psychological factors
The aim of this research is to study the relationship between tax evasion in small and micro business and economic factors related to tax administration, the tax legal framework, internal psychological factors and external structural factors
Summary
The aim of this research is to study the relationship between tax evasion in small and micro business and economic factors related to tax administration, the tax legal framework, internal psychological factors and external structural factors. Our study contributes to international research regarding tax evasion by focusing on micro and small firms in retail trading, a sector which has not been thoroughly examined by academic literature. The fact that the research takes place in a country which has been in recession during the last six years, makes its results important for policy makers, since it provides insight on public policy that could be adopted in order to tackle the phenomenon of tax evasion. The structure of this study includes the bibliographic overview and the formulation of the research hypotheses, the clarification of the selected research methodology, the presentation of the demographic data of our research sample and our research results and, the last section includes a discussion of the findings of our research, our limitations and suggestions for future research
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