The evaluation of the impact of the new tax auditing system in Turkey in the fight against the informal economy

The radical change in the new tax audit system in Turkey in 2011 may contribute to the improvement of public service provision and economic stability by increasing public revenues by providing an effective tax audit, but on the contrary, it may also cause ineffectiveness in the fight against the informal economy as a result of inefficiency. The aim of the fight against the dimension of the informal economy, which is outside the crime economy, is to collect taxes by making the economic activities declared and registered, and to grasp this economic size with the dimensions of tax, employment and national income. While a part of the national income is transferred to the state treasury as taxes, an effective tax control in terms of preventing the informal economy will increase public revenues and thus contribute to the more effective delivery of public services and the establishment of economic stability. This thesis aims to measure the degree of adequacy and contribution to the solution of the problem, and to determine the degree of impact of the change in the tax audit system in the fight against the informal economy. In the first and second parts of our thesis, tax audit, tax audit system and the theoretical framework of the informal economy are emphasized, while the developments in Turkey are tried to be discussed in the light of statistical data. In the third part of the thesis, whether the tax inspection board, which was created with the change in the structure of the finance organization in Turkey in 2011, was effective on the informal economy was tested by econometric methods. Five control variables were used to test this relationship. First of all, in order to see the effect of structural change, first the methods that do not take into account the structural breaks, and then the methods that take into account the structural breaks were used. As a result of the analysis, it was concluded that the tax audit institution established in 2011 was quite effective on the informal economy, since the methods that take into account the structural change give different results than the methods that do not take into account the structural change. Keywords: Tax Audit, Tax Audit System, Informal economy and tax audit, unit root, cointegration and causality test.