This report provides a survey of existing studies on tax avoidance and
tax evasion as well as tax expenditures in developing countries. It
focuses on quantitative studies and discusses the approaches and methods
used and tries to relate and put into perspective the different
estimates. The existing studies may broadly be divided into two groups.
The first group of studies focuses on tax evasion and tax avoidance
related to domestic economic activity. The second group of studies
focuses on tax evasion and tax avoidance related to international
economic activity. This document also identifies a number of areas where
promising research on different aspects of tax revenue mobilisation in
developing countries is possible. This applies, in particular, to the
international component of tax evasion.
The structure of the report is as follows. Section 1 covers the
motivation, scope, limitations and structure of the study. Section 2,
covers the methods and findings of existing quantitative studies in tax
avoidance and tax evasion and discusses tax gap analyses which are
primarily used in developed countries to assess potentials for tax
revenue mobilisation. Section 3 focuses on the question of how political
and administrative contexts affect tax evasion and tax compliance.
Section 4 deals with the specific issue of tax expenditures. Section 5
summarizes the findings, identifies possible areas for future research
Oxford University Centre for Business Taxation, Oxford, UK, vi + 69 pp.
Tax evasion, tax avoidance and tax expenditures in developing countries: A review of the literature