Tackling the illegitimate under-reporting of salaries in Southeast Europe: some lessons from a 2015 survey in Bulgaria, Croatia and FYR Macedonia
To tackle the illegitimate employer practice of under-reporting salaries, the conventional deterrence policy approach seeks to increase the penalties and risk of detection. Recently, however, calls have been made for a new more indirect approach that enhances tax morale so as to nurture a culture of...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Alexandru Ioan Cuza University of Iasi
2017-06-01
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| Series: | Eastern Journal of European Studies |
| Subjects: | |
| Online Access: | http://ejes.uaic.ro/articles/EJES2017_0801_WIL.pdf |
| Summary: | To tackle the illegitimate employer practice of under-reporting salaries, the conventional deterrence policy approach seeks to increase the penalties and risk of detection. Recently, however, calls have been made for a new more indirect approach that enhances tax morale so as to nurture a culture of self-regulation. The aim of this paper is to evaluate these two policy approaches. Reporting evidence from 6,019 face-to-face interviews conducted in Bulgaria, Croatia and FYR Macedonia in 2015, logit regression analysis reveals no association between salary under-reporting and the perceived level of penalties and risk of detection, but a strong association between salary under-reporting and the level of tax morale. The paper concludes by discussing the implications of the findings for theory and policy. |
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| ISSN: | 2068-651X 2068-6633 |