Schneider writes in his report: “reducing the tax burden is the best policy measure to reduce the shadow economy, followed by a lessening of fiscal and business regulation.”

But he goes even further. He and his co-authors suggest that the solution is not just more efficient tax collecting and lighter regulation, but also to find a way to make work in the official economy more attractive and reduce the incentives to participate in the shadow world. At a time when official economies around the globe are dealing with high unemployment, it might be some time before shadow economies lose their appeal. (10)


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