Factors influencing tax evasion in the developing country: A regulatory policy context

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Abstract

Albania is a country that emerged 30 years ago from a centralized and closed economy, where the state controlled the entire economy. During these 30 years, it has experienced a strong transition and has gone through economic and political crises, which have influenced the strengthening or weakening of the role of the state and its economy. One of the problems that remains worrying for Albania is the high level of tax evasion, a phenomenon that weakens the role of the state in the development of stimulating regulatory policies (Tanzi & Shome, 1993), as well as in maintaining financial and economic stability. Economic crime or financial fraud is always the biggest challenge to the local economy (Sutherland, 1940). Through this study, we aim to analyze the main factors influencing tax evasion in Albania, the factors that affect the ability of taxpayers to fulfil their tax obligations, as well as the factors that affect the level of tax income declared by tax-paying entities. We have used primary data taken from a questionnaire with taxpayers and from an interview with tax administration employees. Data have been analyzed through statistical methods, and conclusions were reached to make this research important to tax policymakers.

Keywords: Tax Evasion, Taxpayer, Fiscal Policy, Economic Crime

Authors’ individual contribution: Conceptualization — A.G.; Methodology — A.G.; Formal Analysis — S.U.; Data Curation — G.G.; Writing — Original Draft — A.G.; Writing — Review & Editing — A.G.; Supervision — G.G.; Project Administration — A.G.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H20, H25, H26

Received: 29.11.2023
Accepted: 04.09.2024
Published online: 06.09.2024

How to cite this paper: Gjoni, A., Gogo, G., & Uku, S. (2024). Factors influencing tax evasion in the developing country: A regulatory policy contexts. Journal of Governance & Regulation, 13(4), 8–14. https://doi.org/10.22495/jgrv13i4art1