Politická ekonomie 2022, 70(1):27-50 | DOI: 10.18267/j.polek.1341

Comparing Personal Income Tax Gap in the Czech Republic and Slovakia

Jan Hájek ORCID...a, Cecília Olexová ORCID...b
a University of Finance and Administration, Faculty of Legal and Administrative Studies, Praha; Charles University, Faculty of Law, Department of Financial Law and Financial Science, Praha; Robert Bosch GmbH
b University of Economics in Bratislava, Faculty of Business Administration, Košice, Slovakia

This paper deals with the personal income tax gap in the Czech Republic and Slovakia. One of its sections specifically addresses the relation between the tax gap and various forms of tax evasion concerning the personal income tax, subsequently setting them in the context of its calculation. The key implication of this paper is the estimation and comparison of the personal income tax gap between the Czech Republic and Slovakia using the income method, broken down into specific types of tax evasion, namely (i) unreported income subject to payroll taxes, (ii) misreported tax base by self-employed individuals (i.e., sole proprietors of unincorporated businesses), and (iii) hidden employment. In line with the existing academic literature, a greater magnitude of the tax gap was found for income reported by self-employed persons (i.e., sole proprietors of unincorporated businesses) than for persons with income from dependent activities (i.e., employment and similar legal concepts).

Keywords: Tax gap, personal income tax, Czech Republic, Slovakia
JEL classification: H21, H24, H26, K34

Received: March 31, 2021; Revised: November 2, 2021; Accepted: December 30, 2021; Published: March 14, 2022  Show citation

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Hájek, J., & Olexová, C. (2022). Comparing Personal Income Tax Gap in the Czech Republic and Slovakia. Politická ekonomie, 70(1), 27-50. doi: 10.18267/j.polek.1341
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