Research Information System
in: Current Debates on Public Finance Theory and Practice, M. Erkan Üyümez / Canatay Hacıköylü, Editor, Peter Lang Publishing, Inc., Berlin, pp.159-174, 2023
The tax gap is an integral part of economies. Almost every country has a tax gap.
However, no tax administration has been able to develop a universal calculation
method for measuring the tax gap that can be applied in other countries
(Raczkowski & Mroz, 2018: 567).
The tax gap is that the taxpayers do not fully declare their tax obligations in
their tax returns, pay their taxes incompletely despite fully declaring their tax
obligations, or do not submit the necessary tax returns on time (Joint Committee
on Taxation, 2019: 2). The tax gap indicates the general level of non-compliance
of taxpayers for a given tax year. It includes deficiencies in income tax, corporate
tax, expenditure taxes and other taxes. Country economies do not struggle with
tax losses and evasion as long as the tax gap remains within reasonable limits.
However, with the increase in the tax gap, it emerges as a major problem that
prevents the collection of budget revenues and the fair distribution of income
(Mróz, 2010: 96–118). Therefore, economies need to determine the tax gap to
control the tax gap rate. Therefore, measurement of the tax gap serves as a system
that can take the necessary measures to protect the financial interests of the
countries in the public administration process (Raczkowski, 2015: 567).