Abstract:
Tax competitiveness of the country characterizes the ability of the tax system to obtain
permanent competitive advantages in attracting external and mobilizing internal
financial resources due to the establishment of the optimal level of tax burden and
differentiation of fiscal instruments. The complexity of this indicator determines the
presence of a number of drivers of its formation. Shadow tax evasion is one of them.
The purpose of the study is to assess the impact of the shadow tax evasion of taxpayers
on the level of competitiveness of the tax system on the example of 11 European countries
from 2011 to 2021. The methodological tools are regression analysis methods,
Shapiro-Wilk tests, and Spearman’s rank correlation. It was determined that informal
employment, informal production, and unregistered or informal entrepreneurship are
the most common methods of tax evasion. Based on the results of the calculations,
regression equations of the influence of shadow tax evasion on the level of competitiveness
of the country’s tax system were constructed. It has been proven that shadow
tax evasion exerts the greatest influence on the level of tax competitiveness of Slovenia
(0.32), Romania (0.34), and Croatia (0.26). The least sensitive to shadow tax evasion
is the competitiveness of the Czech Republic’s tax system (0.096). For most analyzed
countries, this influence is carried out with a time lag of 2 years. Only in Croatia, this
influence is the most substantial with a one-year lag.
