The relationship between tax evasion and economy

The aim of the thesis is to examine the relationship between tax evasion and the economy in EU countries and to estimate total tax evasion in the Czech Republic in 2008-2013. For this purpose, an analysis of non-observed economy as an alternative method of tax evasion estimation is used. The results show that tax evasion is increasing (with an exception of 2009) in the Czech Republic reaching 71bn CZK in 2008 and more than 110bn CZK in 2013. This approach allows also to divide total tax evasion between direct and indirect taxes. From this point of view, the higher share belongs to direct taxes in the Czech Republic. This however, may be caused by the nature of non-observed economy which does not cover all types of tax fraud, namely carousel frauds. That is why the presented estimates should be considered as a bottom level of the total tax evasion in the Czech Republic. The second part of the thesis deals with the examination of the relationship of the tax evasion and the development of the economy in EU countries using regression analysis with fixed effects. The regression model is built for all EU countries, separately for high and low tax burden countries and according to geographic clustering. However, not all models passed all verification tests needed to be considered as a reliable model. Only models of high tax burden, central, eastern and northern EU countries can be used for drawing conclusions which was a proof of a negative impact of tax evasion on the economy.