Informal economy: Economics effects and tax morale size

The informal economy is an economic problem since it causes to significant loses in tax revenues in the majority of developed and developing countries. Therefore, countries are making various studies in order to prevent these tax revenue loses. Also, the factors that cause the informal economy are explained according to various approaches. The common property of these approaches is that the causes of the informal economy depend on economic and administrative factors such as high tax rates and insufficient controls. The fact that the informal economy can not be explained only by economic and administrative factors has recently revealed that the informal economy must be examined by social and psychological factors in many respects. The purpose of this work is to examine the social and psychological aspects of the informal economy within the framework of tax ethics. For this purpose, the relationship between the informal economy and tax ethics is analyzed by Spearman Rank Correlation method for three different groups of countries and for three periods as 1999-2014 period for 27 countries, 2005-2014 period for 43 countries and 2010-2014 period for 30 countries. As a result, according to analyzes for 27 countries and 43 countries, it has been reported that there is no a significant correlation between the informal economy and tax ethics. It is also found that there is a medium level positive correlation between the informal economy and tax ethics for 30 countries.