Williams, C.C. orcid.org/0000-0002-3610-1933 and Bezeredi, S. (2017) Tackling the illegal practice of under-reporting employees' wages: lessons form the republic of Macedonia. UTMS Journal of Economics, 8 (3). pp. 243-258. ISSN 1857-6974
Abstract
Recently, there has been growing recognition that some formal employees receive from their formal employers two wages, namely an official declared wage plus an additional undeclared (envelope) wage, which reduces the tax and social contributions paid to the authorities. The aim of this paper is to evaluate two competing approaches for tackling this illegal practice, namely a conventional rational economic actor deterrence approach which increases the penalties and risks of detection, and an emergent social actor approach that seeks to improve tax morale. To do this, a 2015 nationally representative survey comprising 2,014 face-to-face interviews conducted in FYR of Macedonia is reported. The finding is that 13 per cent of employees surveyed received under-reported wages by an amount that averaged 39 per cent of their net salary, and that in just under half (46 per cent) of reported cases, employees are active instigators of such a wage arrangement. Logit regression analysis reveals no association between employees receiving under-reported wages and the perceived level of penalties and risk of detection, but a strong association with the level of tax morale. The theoretical and policy implications are then discussed.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2017 The Author(s). |
Keywords: | envelope wages; tax morale; informal economy; tax evasion; Southeast Europe |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 24 Nov 2017 15:37 |
Last Modified: | 01 Nov 2018 14:39 |
Published Version: | http://www.utmsjoe.mk/files/Vol.%208%20No.%203/UTM... |
Status: | Published |
Publisher: | University of Tourism and Management |
Refereed: | Yes |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:124401 |