The effect of informal economy : An application from Turkey

Today, the informal economy is one of the major problems facing not only the developing countries but also the developed countries. In this context, it is widely discussed that in Turkey a wide range of economic activities are not conducted in a formal manner. The purpose of this study is to search for the causes and consequences of informal economy in mineral oil sector. On this purpose, in-depth interviews were conducted with tax auditors , businessmen and the obtained findings were tested with questionnaire technique applied to industry professionals. The in-depth interview data was analyzed with content and descriptive analysis methods while the survey data were analyzed with descriptive statistics. As a conclusion the results reveal that the main reasons of informal economic activity in mineral oil industry are high tax rates , low tax consciousness and increasing tax audits that are proposed as the main prevention measure.