Measuring the tax gap in the OECD Countries: 2013-2017 Years

Abstract

The tax gap is an issue that has started to attract attention recently. Knowing the size of the tax gap is important for determining the effectiveness of public policies. Especially in recent years, studies on measuring the tax gap of countries have gained momentum. However, since the tax gap measurement requires a comprehensive study, not every country can measure the tax gap yet. This study it is aimed to contribute to the literature. For this reason, it is aimed to measure the tax gap of 38 OECD countries for the years 2013-2017. The methodology used for the measurement has been tried to be revealed. The size of GDP is used to determine the level of the informal economy. Gross domestic product (GDP), the ratio of the informal economy to GDP, and total tax rates were used for the measurement. Tax gap measurements are made in thousands of USD dollars and their share in GDP. Colombia, Costa Rica, and Mexico have the highest tax gap. The countries with the lowest tax gaps were Switzerland, Luxembourg, and Canada. The United States of America, on the other hand, has a high tax gap in terms of thousand USD, but it is around 2 % according to its share in GDP. This situation is associated with the level of development.