Published on October 2014 | Taxation

Tax evasion in Bosnia and Hercegovina and business environment

Global economic crisis and its consequences especially on the countries in transition has contributed to the trend of decreasing economic activities, decreasing employment and increasing the level of tax burden which is especially expressed in conditions of not favourably business environment. Tax evasion has been present in theory for many years, but in our practice, until now it has not been significantly considered and this is one of the research goals to answer what would happen to total business and the economic environment if we decided to radical fight against tax fraud with the goal of increasing public revenues on one side, and relief of economy and increasing of competitiveness both in the domestic and foreign markets, on the other side. Decreasing of tax frauds, before all, would positivly affect on the public sector in long-term perion because it would lead to growth and greater stability of public revenues (grater revenues of VAT as the most important tax form), would create conditions for new investment activity, which affected the growth of companies, and thus the overall growth of the econom.