Informality and Taxation: Evidence from Seven Latin American Countries

• Autores: Manuchehr Irandoust
• Localización: Hacienda Pública Española / Review of Public Economics, ISSN 0210-1173, Nº 248, 2024, págs. 91-114
• Idioma: inglés
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• Resumen

  • This study examines the impact of the shadow economy on taxation in seven Latin American countries between 1993 and 2018. The technique is built using a MIMIC model and a bootstrap panel Granger causality approach. The results show that the variables are related causally, with the shadow economy having a detrimental impact on tax revenues. Governments are advised to embark on labor market and institutional reforms, reduce barriers to firm entry, provide a reliable and sufficient regulatory environment, and provide employee social protection as ways to reduce the informal economy.