Volume 33, Issue 66 (2025)
J Tax Res 2025, 33(66): 0-0 |
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asgari H, moridian A, havasbeigi F. Financial Inclusion and the Shadow Economy: A Case Study of Countries. J Tax Res 2025; 33 (66)
URL: http://taxjournal.ir/article-1-2406-en.html
URL: http://taxjournal.ir/article-1-2406-en.html
1- , h.asgari@ilam.ac.ir
Abstract: (30 Views)
The size of the shadow economy has always been a serious problem in all economies with different income levels and has had significant adverse effects on their development. Therefore, all countries have tried to manage and reduce the size of the shadow economy by taking various measures.
In this situation, the owners of companies and enterprises mention the lack of access to financial resources as the main reason for preferring informal ways for their financing. Also, informal activities may weaken the government's tax revenues and thus the availability of social services, in addition to this, the development of the informal sector of the economy in the country will lead to higher tax rates in the formal sector to compensate for the lack of tax revenues. Due to the high potential of financial inclusion to reduce shadow economy activities, this issue has been placed on the agenda of most countries with the aim of sustainable development. In this article, the relationship between shadow economy and financial inclusion index will be investigated. For this purpose, a panel of countries consisting of 14 MENA region member countries with annual data from 2004 to 2020 was used and analyzed using various econometric techniques. The results of the study showed that financial inclusion will significantly help to reduce the size of the shadow economy. Also, financial inclusion will increase the availability of credit for vulnerable groups and small and medium enterprises and reduce their participation in the informal economy.
In this situation, the owners of companies and enterprises mention the lack of access to financial resources as the main reason for preferring informal ways for their financing. Also, informal activities may weaken the government's tax revenues and thus the availability of social services, in addition to this, the development of the informal sector of the economy in the country will lead to higher tax rates in the formal sector to compensate for the lack of tax revenues. Due to the high potential of financial inclusion to reduce shadow economy activities, this issue has been placed on the agenda of most countries with the aim of sustainable development. In this article, the relationship between shadow economy and financial inclusion index will be investigated. For this purpose, a panel of countries consisting of 14 MENA region member countries with annual data from 2004 to 2020 was used and analyzed using various econometric techniques. The results of the study showed that financial inclusion will significantly help to reduce the size of the shadow economy. Also, financial inclusion will increase the availability of credit for vulnerable groups and small and medium enterprises and reduce their participation in the informal economy.
Type of Study: Research |
Subject:
Economic
Received: 2024/08/20 | Accepted: 2025/03/18 | Published: 2025/09/1
Received: 2024/08/20 | Accepted: 2025/03/18 | Published: 2025/09/1
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