Financial behavior of the taxpayer and the shadow economy: evidence of Ukraine

According to the most researchers highest impacts on the growth of the shadow economy have such factors as informal labor sector progressing in Europe on the background of rising unemployment and imperfection of the tax system and legislation.Quantitative results of measurements of the shadow economy show that in the Baltic countries, as well as in the new members of EU, all the measures to reduce the shadow economy have led to an increase in itsactual volume. This situation has arisen because of the economic crisis, as well as readiness of the participants of the labor market partly or in full to receive wages "in the envelope". The only way, actually having a chance of success, in preventing going into the shadow increasing size of the economy is to reduce the tax burden. Financial behavior of the taxpayer who decides on partial concealment of income or tax evasion is exceptionally rational.Prevent anyone from such a decision by the rational taxpayer is only possible with proper combination of "carrot and stick. As for the taxpayers being already partially in the shadow sector of the economy, the strengthening of tax control only to get them out of the shadows is impossible in principle, because everyone who has crossed that line will not be frightened by increased liability for the already committed, as direct incentive for not to commit such in future.