The tax revenue loses and informal economy

Today, informal economy comes in order as an important social problem in both developed and developing countries. Informal economic activities cause a huge depriciation in tax incomes, the most important item of the public finance. By causing losses in public revenues and preventing a healty look in economic indicators, informal economy also effects the successes of the economic policies in a negative way.In this thesis project, the informal economy reaching to large amounts in Turkey is considered. The aim of this study is to analyse informal economy in all points, to figure out the reasons of formation of the informal economical activities and to confirm the tax losses of the government as a result of informal economyThe tax dimension of the informal economy is emphasized in this study. But the informal economy does not cause only tax revenue losses; besides, it prevents the rise in efficiency, the formation of the fair competititon atmosphere and also catching up the real growth potential of the economy. For these reasons, the solutions of the struggle with the informal economy and also the examples of methods used in the world for the struggle with the informal economy are submitted in the last parts of the study.Keywords : İnformal Economy, Tax Revenue Losses