FOREIGN COUNTRIES' EXPERIENCE IN REGULATING THE SILENT ECONOMY

Аннотация

The main driving forces behind the size and growth of the shadow economy appear to be the increasing burden of taxation and social payments, combined with broader state regulation. Weak and arbitrary enforcement of laws and regulations encourages shadow economic activity; the findings highlight the importance of the rule of law in curbing corruption and related shadow economic activity. This study examines the experience of foreign countries in regulating the Shadow Economy, as well as the work of similar experiments. Keywords. Economy, tax, activity, labor, income, regime, state, order. Аннотация. Основными движущими силами размеров и роста теневой экономики, по-видимому, являются растущее бремя налогообложения и социальных льгот в сочетании с более широкой деятельностью государственного регулирования. Слабое и произвольное применение законов и нормативных актов поощряет подпольную экономическую деятельность; Результаты исследования подчеркивают важность верховенства закона в борьбе с коррупцией и связанной с ней теневой экономической деятельностью. В данном исследовании проведено научное исследование опыта зарубежных стран по регулированию теневой экономики, а также деятельности подобных экспериментов. Ключевые слова. Экономика, налог, деятельность, труд, доход, режим, государство, порядок. Introduction. Taxes and social security contributions are added to the cost of labor in the formal economy, and this in turn is one of the main factors that ensure the growth of the informal economy. If the gap between the total cost of labor in the formal economy and the income that reaches workers after taxes is large, this encourages employers and employees to move into the informal economy to reduce this gap. Since the gap depends in particular on the social security system and the tax regime, these are considered to be the main factors that cause the development of the informal economy. For example, in Germany and Austria, the tax and social security contributions paid by firms and their 197 THEORETICAL ASPECTS IN THE FORMATION OF PEDAGOGICAL SCIENCES International scientific-online conference employees make a large difference in the effective wage for workers. This difference is more likely to encourage workers to move into the informal economy than to continue working in the formal sector. Several studies have found strong evidence that the tax regime has an impact on the informal economy. In Austria, the direct tax burden, including social security contributions, has the largest impact on the growth of the informal economy. The burden of the tax system and the social security contributions attached to it, as well as the number of regulations affecting firms and workers and the complexity of the system, have a significant impact on this process. Similar results have been observed for the Scandinavian countries, Germany and the United States. In these countries, the increased tax burden and the complexity of the tax system create a strong incentive for the growth of the informal economy, as employers and employees are more likely to seek to avoid the formal system. Participation in the shadow economy not only allows for tax reductions but also, in some cases, the ability to bypass bureaucratic processes. In the United States, analysis shows that as the marginal federal personal income tax rate increases by one percentage point, other things being equal, the shadow economy grows by 1.4 percentage points. Similarly, maintaining the highest marginal income tax rate in the United States may hinder further growth of the informal economy. Results and discussion. A study of Quebec City, Canada, shows that people are highly mobile between the formal and informal economies, and as net wages in the formal economy increase, they work less in the informal economy. This study also suggests that where people perceive the tax rate to be too high, an increase in the (marginal) tax rate leads to a reduction in tax revenues. Government regulations can significantly increase the cost of labor for firms in the formal economy. Such regulations include licensing requirements, labor market regulations, trade barriers, and labor restrictions for foreigners. These regulatory constraints lead to additional costs and red tape in the formal economy, which creates strong incentives for firms to shift to the informal economy in order to reduce their costs and operate more efficiently. Employers in the formal economy, in order to reduce the additional costs that are passed on to their employees, often encourage them to work outside the formal system, often in the informal economy. This, in turn, slows down the growth of the formal economy and increases the share of the informal economy. Such growth of the informal economy, in turn, leads to a decrease in government revenues, tax evasion and a deterioration in the quality of public services. A 198 THEORETICAL ASPECTS IN THE FORMATION OF PEDAGOGICAL SCIENCES International scientific-online confe